March has seen the fastest decline in permanent candidate availability in 15 months according to the latest recent Markit/Recruitment and Employment Confederation UK Report on Jobs.

Data from the report also showed that permanent placements also grew in March, but at a slower pace than the previous month. Growth in temp billings also grew across the UK. Furthermore, recruitment consultancies in the UK recorded a further decline in temporary labour supply in March. 

The report also states that the rate of inflation in the UK eased marginally from the previous month but remained above the long-run average.

In London, permanent placements increased for the fifth time in as many months during March. The rise was broad-based across each of the five regions monitored by the survey (South of England, North, the Midlands, London and Scotland). Meanwhile, recruitment consultancies in London recorded a further rise in average temp billings in March.

Candidates available for permanent roles in the capital fell for the 46th successive month during March. The rate of decrease was the most marked since December 2015 and sharper than the UK average. On a regional basis, the steepest drop was evident in London and the slowest in Scotland.

The supply of temporary staff in London fell in March, continuing a trend that has been evident in each of the last 44 months. The rate of decline accelerated from February and was sharp overall. Recruitment consultancies across the UK also recorded a further decline in temporary labour supply in March. Furthermore, the reduction was widespread across the five regions monitored by the survey. The biggest decrease was recorded in the Midlands.

Each of the five monitored UK regions recorded a rise in permanent starting salaries during March.

Temp pay increased further during March, thereby extending the latest period of inflation to six months. That said, the rate of pay growth eased to its weakest since last October and was slower than the solid pace seen across the UK as a whole. By region, temp wage inflation was sharpest in Scotland, while it was weakest in London.

“Finding people to do the jobs on offer is rapidly becoming employers’ biggest headache, and many are reporting an increasing number of white-collar jobs as hard to fill, including in the IT and financial sectors,” REC Chief Executive Kevin Green, said.

“Shortages of appropriately skilled, willing and able candidates was a problem before the referendum. Our concern is that Brexit will make the problem worse, particularly if onerous restrictions are imposed on people coming from the EU to work,” Green said.“Also, economic uncertainty about future prospects is having a detrimental effect on employees’ willingness to risk a career move at this time, which seems to be driving down candidate availability. Our data shows London and the South, where financial services jobs are concentrated, as particularly suffering from low candidate availability for permanent job vacancies.”

“This shrinking talent pool of available candidates means that businesses are boosting the starting salaries and hourly rates they are prepared to offer to the right candidate,” Green said. “So for job hunters willing to move roles at the moment, there are financial rewards on offer – especially it seems in finance, IT and other management and office-based professional roles.”