Candidate availability in the UK fell to its sharpest level in four months in September while the availability of temporary workers also fell at a historically marked pace, according to the latest IHS Markit/REC (Recruitment and Employment Confederation) Report on Jobs.

“Recruiters are finding it even harder to find people to fill vacancies. Candidate availability has been falling for the past four years and the record high UK employment rate plus a slowdown in the number of EU nationals coming to work here is exacerbating the situation, potentially leaving roles unfilled,” Kevin Green, REC Chief Executive, said.

Meanwhile, the strong demand for staff and a further drop in candidate availability placed further upward pressure on pay during September. Permanent starting salaries rose at the second-steepest rate in 22 months (after August), while temp pay growth softened only slightly from August’s 16-month record. 

Permanent staff placements rose at the softest pace since April at the end of the third quarter ending September. Temp billings meanwhile rose sharply, despite also seeing pace of expansion moderate from the previous month.

On a regional basis, growth of permanent placements was the most marked in the Midlands and the South of England. London meanwhile signalled a renewed drop in permanent placements (albeit marginal). The quickest rate of temp billings growth was seen in Scotland, closely followed by the North of England. The weakest upturn was registered in London. 

“Across the UK permanent placements are slowing, but London is faring worse with placements declining for the first time in eleven months and the financial sector in particular struggling to recruit for roles such as audit, payroll and risk,” Green said.

“Low-skill roles are also hard to fill in areas like food processing, warehouses and catering – sectors that employ a higher proportion of people from the EU than others across the economy. We urge the government to ensure any new immigration system includes provisions for low-skilled and temporary workers so that warehouses, supermarkets and restaurants can access the people they desperately need,” Green said.

The sharpest overall increase in demand for staff was recorded for permanent workers in the private sector, while the weakest rise in staff vacancies was seen for permanent public sector workers. Accounting/Financial was the most sought-after category for permanent staff in September, followed by IT & Computing. The slowest (albeit still marked) increase in vacancies was reported for Construction.  

 Blue Collar achieved first place in the rankings for temporary/contract staff demand during September, while Nursing/Medical/Care scored second place. All remaining categories also saw steep increases in demand.

The data from the Report on Jobs also showed that the number of job vacancies across the UK continued to rise sharply during September, with growth of staff demand edging down only slightly from August’s recent peak.