Permanent staff placements hit two-and-a-half year high, as skill shortages ease

Octoberís Report on Jobs survey signalled that growth of permanent staff placements reached a thirty-month high, driven by strengthened demand for staff and easing skill shortages. In contrast, temp billings rose at the slowest pace for six months. Meanwhile, wages and salaries recorded a further robust rise.

The Report on Jobs, published today by the Recruitment and Employment Confederation and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.

Commenting on the latest survey results, Michael Carter, People Services Partner at KPMG said:

ìThis month the engineering and construction sectors continue to dominate demand for both permanent and temporary staff. With ongoing projects such as T5 and large construction projects for the Olympics starting to come to the fore, we are seeing a real ëbattle for talentí being fought in these sectors. Itís one that is unlikely to ease for a long time.

ìHowever, one factor in the easing of skills shortages seem to be that the type of position sought has changed and the resourcing of suitable candidates is easier. This month, the Secretarial and Clerical sector, has moved up the league, overtaking Accounting and Financial and Executive and Professional. Clearly very different skills are needed to satisfy these positions, and perhaps provide evidence that employers are seeking to push work down to secretarial and clerical staff in an effort to free up highly skilled staff to pursue more profitable business.î

Also commenting on the report, Marcia Roberts, Chief Executive Officer, Recruitment and Employment Confederation (REC) said:

ìWhilst overall figures in this monthís report indicate that skill shortages are easing, this is only likely to be temporary. As we approach the festive season, the retail boom will see a rapid increase in demand for staff, particularly temporary workers who provide an invaluable flexible resource at this time of year.î

Roberts continues:

ìFeedback from our members suggests that the lack of suitable candidates for positions in industries such as construction and engineering continues to be an area of serious concern. If large projects, such as the Olympics, are going to be built then a diverse approach to sourcing skilled workers is needed. This includes better investment in training in the UK as well as the ethical recruitment of migrant workers. The government should consider these skills gaps when addressing immigration policy and employers should seek the expertise and support of recruitment professionals in ensuring that overseas candidates are recruited correctly.î

Further rise in staff appointments...

Latest data signalled that both permanent and temporary staff appointments continued to rise in October. However, growth trends diverged, as permanent staff placements increased at the sharpest rate for two-and-a-half years, while expansion of temp billings eased to a six-month low.

...underpinned by expansion in job vacancies

Consultancies indicated that demand for staff at client companies continued to strengthen in October. Growth of permanent staff vacancies reached a twenty-two month high, while temporary vacancies rose at the fastest pace for three months.

Inflationary pressure on pay remained substantial...

October data signalled that upward pressure on pay remained marked, as permanent staff salaries increased at a rate broadly unchanged from Septemberís peak, while inflation of temporary staff pay hit a twenty-two month high.

...despite evidence of easing skill shortages

Panellists reported fewer problems finding qualified staff in October. Although permanent staff availability continued to decline, the rate of contraction eased to the weakest in six months. Meanwhile, temporary staff availability improved for the third month in a row.