REC/KPMG Report on Jobs: Permanent Placements Rise Further in May, Albeit at Slowest Pace in Four Months

 

Key points:

• Growth of permanent placements eases, but remains marked overall

• Temp billings rise at faster pace

• Permanent salary growth remains strong

  Summary:

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 placements growth eases…

Permanent staff placements continued to rise in May. However, the rate of expansion moderated to a four-month low. This mirrored an easing in growth of available vacancies for permanent staff, with the latest increase the slowest in 2015 so far.     

...but temp billings rise at faster pace

Agencies’ billings from the employment of temporary/contract staff increased further in May. The rate of growth in short-term appointments was strong, having quickened since April. 

Salary growth cools, but still strong…

Starting salaries for people placed into permanent jobs increased further in May. Although easing from April’s nine-month high, the rate of growth remained strong overall. Temporary/contract staff hourly pay rates rose further, albeit at the slowest pace since January.

…as candidate availability remains tight

Recruitment consultants reported continued difficulties regarding the availability of suitable staff for permanent roles in May. Although easing slightly since April, the rate of deterioration in permanent staff availability remained marked. Temp availability also fell sharply, with the latest drop the fastest in seven months.

Regional and sector variation

Permanent placements growth was broad-based across the English regions in May. The South registered the fastest rate of expansion, closely followed by the Midlands.

 

The Midlands and London posted the sharpest growth of temporary/contract staff appointments during the latest survey period, while the slowest increase was signalled in the South. 

 

Private sector roles continued to register a higher rise than public sector vacancies in the latest survey period. Private sector permanent staff saw the fastest increase overall.

 

Demand rose for all monitored categories of permanent staff in May. Executive/Professional employees registered the sharpest expansion of demand, while the slowest growth was indicated for Construction workers.

 

Nursing/Medical/Care was the most in-demand category for temporary/contract employees during May. At the other end of the table, the weakest growth of demand was signalled for Construction staff.

 

Comments:

Kevin Green, REC chief executive, says:

 

“It’s imperative that the new government gets to grips with skills shortages because a jobs crisis is looming. Recruiters are doing a great job at getting more and more people into work, but four in ten of those recruiters say that the availability of candidates is getting worse each month.

 

“Businesses are looking to expand, and roles like marketing, legal and HR are increasingly in-demand. This is good news for jobseekers because they can command higher starting salaries as employers compete for talent. But at the same time, shortages are a serious threat to long-term sustainability for organisations within both the private and the public sector.”

 

On the Department for Health’s announcement that new measures will be introduced to restrict NHS spending on agency nurses and doctors, he adds: 

 

“Framework agreements set by central government already exist to manage the relationship between the NHS and recruiters, and limit prices. The proposals for further regulation miss the point, which is that doctors and nurses are not available to fill all the current permanent vacancies in the NHS. The government’s proposals for changes to the contractual relationship with agencies risk creating more problems than they are trying to fix.

 

“Recruiters have told us consistently over the last year that candidates to take up permanent nursing and care roles especially are in short supply, and demand is increasing rapidly. The government needs to train new nurses, make permanent roles in the NHS more attractive, and engage with agencies about how to safely staff hospitals in order to meet increasing demand from patients.”

Bernard Brown, Partner at KPMG, comments:

 

“The UK job market saw a slight slowdown in May, as those on boards took time to digest the election result and work out the ramifications for their business.  This pause did not dampen temporary staff placements, and temp billings rose for a twenty-fifth consecutive month.

 

“Growth in the services sector continued to outpace that of Britain’s heavy industries, with the former seeing a significantly stronger appetite for new hires to keep up with the volume of new orders coming in.  These statistics will add more weight to the fears that the economy is not rebalancing as hoped, and are a worrying reminder of the recovery’s reliance on the performance of the white collar service sector.

 

“While elements of the private sector are thriving, the public sector continues to suffer, with pay growth rising by just 0.2% in the last reported quarter. This stagnation is in stark contrast with the pay awards seen in Britain’s businesses, whose staff saw average rises of 2.4%, driven by the booming service sector. With the Government’s continued focus on austerity, this imbalance is unlikely to be readdressed in the near future.”

 

ENDS