Further buoyant demand for staff recorded in November

Further buoyant demand for staff recorded in November, but skill shortages hit growth of candidate placements.
The latest REC/Deloitte Report on Jobs showed that further buoyant demand for staff resulted in higher levels of recruitment activity in November. However, the rate of growth of permanent staff placements and temporary staff billings eased compared to October.

Meanwhile, candidate availability was again substantially lower than in the previous month, and this was reported by consultancies to have made it increasingly difficult to fill certain vacancies. Starting rates of pay continued to rise strongly, although the rate of increase was less marked than in October.

Commenting on the latest report, Brett Walsh, European Head of Human Capital at Deloitte reported that:
The latest Report on Jobs showed that demand for staff in the UK rose for the seventeenth consecutive month in November. The tightening job market, particularly at this time of year, makes it increasingly difficult for employers to attract suitably skilled candidates. Retailers are likely to be particularly effected, with 20% of firms reporting in Deloitte’s Annual Christmas Retail Survey that they will be unable to recruit the right staff to work over the Christmas period.

Also commenting on the latest report, Gareth Osborne, Managing Director at REC reported that:

The employment market continues to be characterised by a tightening in supply with severe skills shortages emerging as one of the biggest threats to continuing growth in the economy. If the UK economy is to meet its predicted growth in the next few years, action needs to be taken quickly and purposefully to improve the employability of the workforce.

Permanent staff placements and temporary staff billings rose at slower rates in November

The latest Report on Jobs survey showed that the number of people placed in permanent jobs by UK recruitment consultancies rose for the eighteenth consecutive month in November. Nevertheless, although still marked, the rate of growth of placements eased from October to the slowest since August 2003. A number of consultancies attributed slower growth of placements to difficulties filling certain vacancies as a result of widespread skill shortages amongst available candidates. Meanwhile, billings received from the employment of temporary and contract staff were also up for the eighteenth month running in November. The rate of increase in billings eased slightly from the three-month high recorded in October, but was stronger than that recorded for permanent staff placements.

Marked increase in actual employment

Rising staff placements contributed to a further expansion of actual private sector staffing levels in November, as measured by the CIPS/Reuters Employment Index, which registered growth for the sixteenth successive month. Furthermore, the rate of increase in staffing levels picked up to the fastest since June 1998. Stronger growth of employment reflected sharper increases in construction and service sector staffing levels. Manufacturing sector employment also continued to rise.

Demand for staff remained strong

Ongoing growth of staff appointments again reflected strong demand for staff by employers in November. The rate of improvement in demand for staff indicated by the Report on Jobs Vacancies Index was only slightly less marked than the near four-year high recorded in October. Demand for all main types of employee was higher than in the previous month. For permanent staff, the sharpest increase in demand was reported for Engineering/Construction staff. Meanwhile, for temporary staff, demand for IT/Computing staff rose at the fastest rate.

Lower candidate availability

The availability of candidates to fill vacant positions at employers was again substantially lower than in the previous month in November. The sharpest decline in availability was reported for permanent staff, which fell for the thirteenth month running.

Rate of inflation of pay rates remained sharp

Rising demand for staff and widespread skill shortages pushed pay rates up sharply again in November. Average salaries awarded to people placed in permanent jobs rose for the sixteenth month in a row, although the rate of increase was the least marked since April. Meanwhile, temps’ hourly pay rates rose at the second fastest rate since August 1998.