The latest Report on Jobs from KPMG and REC UK has found the number of people placed into permanent jobs in the UK rose at a sharp and accelerated rate in October. Notably, the latest increase was the second fastest since March. At the same time, billings for temp staff expanded at the quickest pace since May. Although job vacancies expanded at the softest pace for nearly two years in October, growth of demand for staff remained historically sharp at the start of the fourth quarter.
Starting salaries continued to rise sharply in October, with the rate of inflation holding close to September's 41 month record. Hourly pay rates for temporary staff also increased markedly, despite the rate of growth edging down to the least marked since March. Overall candidate availability declined at the quickest pace for nine months in October. The supply of both permanent workers and temporary staff fell at steeper rates compared to September, with the former noting the sharper pace of reduction.
All four English regions monitored by the survey registered steep increases in permanent placements, led by the South of England. The Midlands saw the quickest increase in temp billings in the latest survey period, though sharp rates of growth were also registered elsewhere.
“Skills shortages are a long-standing feature of our economy,” said Neil Carberry, chief executive at the REC. “They affect the ability of employers to grow and create jobs. That we have shortages in key skilled roles like IT, engineering and health is a sign that the right training and support is not in place for people to progress into these jobs from lower skilled work.
“While firms spend a lot every year on training, this mismatch persists,” he continued. “It’s time for businesses and government to work together to address it. Renewed investment from firms must be partnered with openness from government to doing things differently, starting with the reform the Apprenticeship levy needs, turning it into a skills levy that supports all workers to have access to the training they need.”
“A new partnership is also necessary in our NHS,” added Carberry. “As we head towards winter we are once again seeing potential shortages of nursing, medical and social care staff. Working with recruiters to address this should be a government policy priority – without access to agency workers key front line services could be put under threat.”
James Stewart, Vice Chair at KPMG, also commented on the report, saying: “Whilst Brexit may be dampening overall business investment, firms continue to hire new staff at near record rates. With the jobs market so heated, businesses across the country, of all types, are struggling to find work ready staff. Particular pinch points include IT, engineering, nursing and care staff. Some clients tell us they are seeing the worst period of staff availability for 20 years. A four-decade low in unemployment and a dwindling supply of EU workers means good candidates are at a premium. Consequently, we’re seeing wages pushed upwards and a trend of canny workers job hopping to secure a pay rise rather than remaining loyal to their existing employers.”