REC/KPMG Report on Jobs: Permanent salaries rise at fastest rate since July 2007

Filed under Press release

Tuesday, 08 April 2014

Key points:
- Faster increase in permanent salaries but temp pay growth eases
- Sharper decline in candidate availability
- Growth of staff appointments eases but remains strong

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies. 

Permanent salary growth accelerates

Starting salaries for people placed in permanent jobs increased strongly in March, with growth picking up to the sharpest since July 2007. However, temporary/contact staff pay increased at the slowest rate in five months.  

Steeper decline in candidate availability

Recruitment consultants indicated further reductions in the availability of candidates in March. Permanent staff availability fell at the sharpest rate since October 2004, while the latest drop in temporary/contract staff availability was the fastest in almost 10 years. 

Permanent and temporary appointments rise at slower rates
Rates of growth in both permanent and temporary staff appointments eased during March, but remained strong overall.

Further marked increase in vacancies
Demand for staff continued to rise at a marked pace in March, with the rate of expansion only just shy of January’s 15½-year high.


Regional and sector variation
Marked increases in permanent placements were recorded in each of the four English regions monitored by the survey, with the strongest growth indicated in the North.


The Midlands led a broad-based upturn in short-term staff billings in March. The slowest growth was recorded in the North.


Private sector demand for staff remained stronger than that in the public sector during March. The fastest growth was signalled for private sector permanent roles, although private sector temporary vacancies also recorded a strong rise. 


In the public sector, solid increases in demand were seen, with public sector positions registering a faster rise than private sector roles. 


Demand rose for all nine types of permanent staff in March. The strongest growth was signalled for Engineering workers, while the slowest increase was recorded for Blue Collar employees.


Nursing/Medical/Care led a broad-based expansion of demand for temporary/contract staff in March. Engineering and Blue Collar were in second and third places respectively in the demand for staff ‘league table’.


REC Director of Policy Tom Hadley said:

“The trend of growth in people finding jobs across all industrial sectors and regions continues. Starting salaries and hourly pay rates are up as employers battle to entice the talent they need. As real wages begin to rise across the jobs market people will start to feel better off.

“However worsening candidate shortages mean that the number of people available to fill both temporary and permanent jobs is falling at the sharpest rate in nearly a decade. We have a core group of long-term unemployed people whose skills don’t fit with current vacancies and are unable to access the jobs market.

“As well as up skilling UK workers, the government needs to take a joined up approach to immigration. A priority is addressing the restrictions on visas for highly skilled workers, which would allow businesses to access the people they need to grow and create jobs for more British workers.” 


Bernard Brown, Partner and Head of Business Services at KPMG, comments:
“Britain may not yet be near the levels of full employment that Chancellor George Osborne committed to last week but, with permanent and temporary placements remaining strong, anyone looking for a new job must be increasingly confident that their search will soon be over. It’s particularly encouraging to note that employers are focusing on full-time employment, with more organisations offering contracts for permanent positions than temporary roles over the past month.

“It also appears that employers are attempting to encourage candidates to move away from the short-term mentality of temporary roles by raising the bar with the starting salaries aligned to permanent positions.  Today’s data shows ‘offer salaries’ picking up at their sharpest pace for almost 7 years, whilst contract staff saw their pay increase at the slowest rate since November 2013.  It’s a welcome sign that employers have enough confidence to commit their balance sheets to long term employment plans.

“If that wasn’t a clear enough indication that employment is on the up, the data also shows that demand for staff continues to rise.  Marginally up on the figures for February, the latest data suggests that engineering, construction and IT are the sectors hungriest for talent.  It’s all good news, but the next step will be for candidates to put themselves forward for the role on offer – something they still seem unwilling to do.”

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