The latest KPMG and REC UK Report on Jobs survey has seen recruitment consultancies across the UK continue to signal tight labour market conditions. Using data from the end of 2021, permanent staff appointments and temp billings continued to rise at historically sharp rates despite the upturns remaining weaker than the peaks seen during the summer.
Vacancy growth softened slightly, easing to an eight-month low, though overall demand for staff remained robust. At the same time, there were signs that candidate availability was moving in the right direction, with the latest drop in staff supply the least severe in eight months. Nonetheless, competition for scarce workers pushed up rates of starting pay for both permanent and temporary staff again, with the respective rates of inflation among the quickest on record.
Recruitment consultancies registered further substantial increases in both permanent placements and temp billings at the end of 2021 amid reports of robust demand for staff and greater client requirements. Permanent placement growth continued to outpace the upturn seen for temp billings.
Starting salaries for permanent workers and temp hourly pay continued to rise rapidly in December, with the respective rates of inflation holding close to record-highs. Panellists frequently mentioned that starting salaries and wages had risen as demand for staff continued to outstrip supply.
Regional data highlighted that permanent staff appointments increased across all four monitored English regions in December, with the North of England registering the fastest upturn. The upturn in temp billings was also broad-based although the quickest expansion was seen in London, while the softest was in the Midlands.
Vacancies continued to increase at a stronger pace in the private sector than in the public sector in December. The fastest growth rate was signalled for private sector permanent roles, while the softest rise was indicated for public sector temporary jobs.
Commenting on the latest survey results, Claire Warnes, head of education, skills and productivity at KPMG UK, said: “The UK jobs market rocketed to near historic levels as New Year approached. That’s despite it losing a little fizz with the pace of accelerating demand for staff, wage and salary growth and vacancies all easing slightly. Employers in all sectors haven’t lost their appetite to hire, but many will be frustrated by the pressure these inflationary and competitive conditions, which are likely to continue for some time, are putting on their operating costs and ability to expand.”
Neil Carberry, chief executive of the REC, added: “2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue. This survey shows again how tight the labour market was at the end of last year. Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling. These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021.
“Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce,” Carberry continued. “Recruiters are ideally positioned to help employers with this, and support governments across the UK on the skills, immigration and tax reforms that are needed to keep us competitive.”
