November data from the IHS Markit/REC Report on Jobs has indicated that permanent staff placements rose at the quickest pace for three months, supported by strong underlying demand for staff. Growth of temp billings also remained marked, and picked up slightly since October. Staff vacancies rose sharply for both permanent and temporary roles in November. However, overall growth of demand for staff weakened slightly due to a softer increase in permanent staff vacancies.
Starting salaries for permanent staff continued to rise sharply on the back of strong demand for staff and skill shortages. Despite easing since October, the rate of inflation remained strong. Temp wages also continued to rise at a marked pace midway through the fourth quarter. Recruitment consultancies reported a further steep drop in permanent candidate availability during November. This was despite the rate of reduction easing to the weakest for seven months. Temp candidate supply meanwhile declined at a slightly quicker rate than seen in October.
The strongest increase in permanent placements was seen in the Midlands, followed by Scotland. The South of England meanwhile registered a modest upturn that was the weakest of all monitored UK regions. Growth in temp billings remained broad-based across all monitored UK regions, led by the North of England. Demand for staff remained much stronger across the private sector than the public sector in November.
“Despite the current uncertainties caused by Brexit and political turmoil, recruiters are placing more people into jobs – particularly in the private sector,” said Kevin Green, REC chief executive. “Recruiters also continue to report deteriorating candidate availability and worsening skills shortages. Having less access to candidates can have severe effects, restricting businesses’ ability to grow which means they won’t be able to create jobs or increase pay for staff. Although some hirers are responding by raising starting salaries in an attempt to attract scarce talent, there’s no evidence yet this is leading to pay increases for the wider workforce and those who fail to hire will find themselves in dire straits.”
Green says the government should make a New Year’s resolution to ensure that the UK labour market remains successful in 2018. This involves creating certainty for EU workers that are already here, such as nurses, warehouse staff and chefs. The government must agree the transitional arrangements in relation to freedom of movement, which they have said they are potentially going to extend to March 2021. They need to define what kind of access UK employers will have to EU workers post-Brexit, at both the high and low end of the labour market.
“In addition,” says Green, “the government needs to think longer term about how to fill vacancies left by EU workers. Turning the Apprenticeship Levy into a broader training levy will help, enabling employers and recruiters to train temporary workers and contractors so they can progress in the jobs market.”