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UK - Temporary placements rise at fastest rate in seven months

08 August 2014

A six month high in demand for new staff among recruitment firms is being balanced by a continuing skills shortage according to the latest Recruitment and Employment Confederation’s (REC) JobsOutlook survey of employers.

Each of the four English regions covered by the survey registered higher permanent placements in July, with the sharpest growth signalled in the South. The Midlands posted the strongest expansion of temp billings during the latest survey period, with growth there considerably faster than in the other regions.

Latest data indicated that private sector demand for staff remained considerable stronger than that in the public sector during July. The strongest overall rise in demand was recorded for private sector permanent employees, where growth was at a five-month high.

Construction workers were the most in-demand type of permanent employee during the latest survey period, closely followed by Engineering staff. All categories recorded strong rates of growth. All nine monitored temporary/contract staffing categories recorded higher demand during July. Mirroring the trend for permanent employees, Construction workers were the most sought-after.

 Commenting on the latest survey results, Bernard Brown, Partner and Head of Business Services at KPMG, said:

“For the first time in months 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.

“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.”

In detail, the report shows the number of people placed in permanent jobs rose for a twenty-second consecutive month in July. Moreover, the rate of expansion accelerated to the fastest since February. Close to half of all panellists reported an increase in placements, compared with around 13% signalling a decline. Anecdotal evidence pointed to strong client demand, reflective of improved confidence in the general economic outlook.

Agencies’ billings from the employment of temporary and contract staff continued to increase in July. The rate of growth was substantial, having quickened to a seven-month high. Panellists attributed higher revenues from short-term placements to rising business requirements at clients.

The Jobs Vacancy Index was at its highest since January and signalled a strong rate of expansion in demand for staff. Both permanent and temporary employees registered marked increases in demand, with the former posting the slightly sharper growth.  Construction workers were the most in-demand type of permanent employee during the latest survey period, closely followed by Engineering staff and then Nursing/Medical/Care staff. All categories recorded strong rates of growth. All nine monitored temporary/contract staffing categories recorded higher demand during July. Mirroring the trend for permanent employees, Construction workers were the most sought-after followed by blue collar staff.

The rate of decline in permanent staff availability hit a new series record in July. More than half of panellists (around 54%) signalled a reduction in permanent candidate supply during the latest period, compared with just 8% that noted an improvement. The Midlands led a broad-based decline in permanent staff availability during July.

Temporary/contract staff availability continued to fall in July, extending the current period of contraction to 13 months. Moreover, the rate of decline was the sharpest since March 1998. The drop in temporary availability was broad-based across the English regions, with the Midlands posting the steepest reduction.

Key temp skills reported in short supply are all follows:

  • Accountancy/Financial: Compliance, Finance, Internal Audit, Risk, Treasury.
  • Blue Collar: HGV/LGV Drivers, Joiners, Mechanical Fitters, Painters, Welders.
  • Construction: Planners, Project Controls, Site Managers. Engineering: Electrical, Engineers, Technicians.
  • IT/Computing: Architects, Business Intelligence, Developers, Java, .Net, PHP, SQL.
  • Nursing/Medical/Care: Care Workers, Medical Secretaries, Nurses.
  • Secretarial/Clerical: Clerical Workers, Office Staff, Receptionists.
  • Other: Locums, Reprographics, Sales, Teachers.

July data signalled a further strong increase in average starting salaries for candidates placed in permanent roles. The latest rise was only fractionally slower than June’s survey record. Panellists commented that salaries were being driven higher by competition between employers for skilled candidates, who were frequently reported to be in short-supply. Salaries rose in each of the four monitored English regions during the latest survey period, with the Midlands posting the sharpest increase.

Hourly rates of pay for staff in temporary/contract employment continued to rise in July. Although easing from June’s 79-month high, the rate of increase remained marked. The Midlands posted the strongest rise in temp pay rates comfortably, with the other three English regions seeing solid increases.

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.

“The UK’s post-recession problem is skill and talent shortages. 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.”

Commenting on the fact that the construction sector topped the tables for demand for both permanent and agency staff Kevin 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.”   

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