The number of people placed in permanent jobs by recruitment consultancies across the UK rose in October, according to the latest Report on Jobs from IHS Markit/REC (Recruitment and Employment Confederation) and professional services firm KPMG.

Demand for staff among clients, as well as relatively buoyant market conditions were cited as the driving factors in the upturn in permanent staff appointments. All four English regions monitored by the survey registered steep increases in permanent placements, led by the South of England.

However, at the same time, the report states that candidate shortages dampened the overall rate of growth in permanent placements.

Meanwhile, the report also indicated that billings received from the employment of temporary/contract workers rose further in October. The rate of expansion was the fastest seen since May with recruitment consultancies attributing the rise to robust demand for short-term workers and, in some cases, the inability to secure permanent staff.

Turning to vacancies, the Report on Jobs Vacancies Index posted a 60.3 which is well above the neutral 50.0. However, this was down slightly from 60.5 in September and the lowest reading for just under two years.

Vacancies for both permanent and temporary staff grew at marginally softer rates compared to the previous month. Demand for staff continued to increase at a quicker pace across the private sector compared to the public sector during October.

The IT & Computing and Engineering sector registered the steepest increase in demand among permanent vacancies. Meanwhile, Nursing/Medical/Care topped the rankings in terms of demand for temporary workers in October.

The Report on Jobs also indicates that the overall availability of staff continued to decline across the UK during October, as has been the case in each month since May 2013. Notably, the rate of contraction accelerated quickest since January. The data showed that permanent staff supply continued to fall at a faster rate than for temporary candidates.

Neil Carberry, Chief Executive at the REC commented, “Skills shortages are a long-standing feature of our economy. 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.”

“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 frontline services could be put under threat.”

In October, starting salaries continued to rise sharply, 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.

James Stewart, Vice Chair at KPMG, commented, “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.”