Permanent job placements rise at fastest rate in five months
08 August 2014 -
Employer demand drives increase in permanent and temporary staff vacancies in July – but there is a record decline in the availability of permanent candidates
The number of workers placed in permanent jobs by recruitment consultancies in July was at a five-month high, according to the latest monthly report from the Recruitment and Employment Confederation (REC) and KPMG. Based upon data from agencies, the UK labour-market survey also found the number of temporary job positions filled was at a seven-month high during the same month.
With that growth provided by the private sector, the substantial rise in temporary and permanent jobs is a result of greater demand from employers looking to expand their firms. The data revealed that available job vacancies continued to rise apace in July, with growth quickening to the fastest since January. However, the report showed that there is a substantial decline in the number of available candidates: Permanent staff availability fell at its sharpest rate in July since the survey began in 1997 – and temporary staff availability decreased at the fastest pace since March 1998.
That low availability has played a significant role in the average starting salaries of permanent workers remaining strong in July to tempt workers into switching jobs. The increase of permanent pay was just fractionally below June’s survey-record high. Moreover, growth in temporary staff pay was also high, despite being lower than the average produced in June which was a 79-month high.
REC CEO Kevin Green said: “The jobs market continues to go from strength to strength with a further increase in the number of people finding new jobs last month, and both starting salaries and hourly pay rates continuing to grow. Over a third of recruiters report they secured higher salaries for candidates they placed into permanent jobs in July than for the equivalent roles in June.”
However, Green warned, the biggest challenge facing UK businesses is a serious talent gap, which will only continue to constrain the economy if firms fail to take on more young people and train them thoroughly. “The UK’s post-recession problem is skill and talent shortages,” he said. “The economy is going to be constrained by this ongoing talent crisis if employers keep doing business as usual. Hirers need to take on more young people and train and develop their employees like never before. Investing in staff development will help companies attract and retain talent. And our policy makers need to put politics to one side and take a sensible approach to immigration which focuses on helping British businesses get the skilled people they need.”
Construction workers were the most in-demand type of permanent and temporary employee during the latest survey period. Green added: “The demand for staff in UK construction shows the industry is rising out of the recession. But without more people skilled, available and willing to take jobs as site managers, joiners and electricians we can’t build the new homes and infrastructure that this country desperately needs.”
Regionally, the sharpest growth in permanent placements in July was found in the South, while the Midlands posted the strongest expansion of temp billings during the latest survey period. However, all four English regions covered by the survey registered higher permanent and temporary placements in July.
Bernard Brown, Partner and Head of Business Services at KPMG, says the report shows employers finally feel confident enough in the economy to add fresh talent to their rosters. “For the first time in months,” he said, “we are witnessing churn in the labour market. It seems that employees are finally beginning to wake up to the opportunities available to them, with the rates of growth of both permanent and temporary placements accelerating simultaneously for the first time since the winter.”
He added: “Perhaps it’s true that ‘every person has their price’, because the movement in labour is coinciding with another rise in starting salaries. Just a few months ago, employers couldn’t tempt staff to switch roles, but indications are that employees’ caution over change is being replaced with hunger for something new. It’s particularly prevalent in the Midlands: all the indications are that if you want a new job and want an improved salary offer, the central part of the UK is the place to be.”
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