Slower growth of staff appointments…
Permanent staff placements continued to rise in July, but the rate of growth eased further from April’s recent high to the slowest in over two years. Similarly, temporary/contract staff billings increased at the least marked pace in 25 months.
…as candidate shortages bite…
The availability of staff for permanent roles fell further in July, with the rate of decline accelerating to the sharpest since November 2014. Temporary/contract staff availability also decreased, although the rate of deterioration eased to the slowest in five months.
…and demand for staff softens
Overall vacancy levels increased at the slowest rate in two years during July. Rates of expansion eased for both permanent and temporary/contract staff.
Permanent salary inflation eases
Although starting salaries for permanent hires continued to rise in July, the rate of increase moderated further from April’s recent peak to an 18-month low. However, temporary/contract staff pay growth quickened to the fastest since April.
Regional and sector variation
All four English regions posted increased permanent placements in the latest survey period. The strongest growth was signalled in the Midlands, while the South saw the slowest rise.
As was the case for permanent appointments, Midlands-based agencies registered the fastest growth of temp billings in July, with the slowest increase seen in the South.
Private sector vacancies continued to post the fastest expansion in July, although growth eased since June. Public sector roles increased at an accelerated pace.
Engineering employees were the most sought-after type of permanent staff in July, closely followed by Construction workers. The slowest growth was signalled for Hotel & Catering staff.
Construction led a broad-based rise in demand for temporary/contract staff in July. Nursing/Medical/ Care was in second place. Executive/Professional posted the slowest (albeit still marked) rate of expansion.
Bernard Brown, Partner at KPMG, comments“It is clear we are in the grip of an industry wide skills shortage, which shows no signs of abating. Businesses are struggling to find the talent they need and this will have long term implications for their growth plans and potentially impact the wider performance of the UK’s economy. In July over two fifths of recruiters reported a fall in the number of people looking for work, the steepest decline seen in eight months.
“The construction industry in particular is struggling to keep pace with demand, with businesses heavily recruiting both permanent and temporary workers. This is driving significant pay growth in the sector of almost 5%, outstripping Britain’s surging services industry which in comparison saw pay increases of just over 3%
“The risk is that a shortage of skilled labour in this sector could impede Britain’s major building projects and put the brakes on the country’s real estate market.
“The likelihood is we will see no immediate improvement to this situation. We are already seeing hints of a slowdown, with the loss of growth momentum in housebuilding and civil engineering in July.”
REC chief executive Kevin Green, says: “While demand for staff remains strong, the labour market is tightening. Alongside long-term problem areas such as technology and engineering, we’re now seeing vacancies such as bricklayers and drivers being flagged as hard to fill.
“The shortage of construction workers is a particular concern. If construction companies don’t have the people they need, both infrastructure projects and house building will be constrained, and this will have an impact on wider economic growth.
“As students wait in anticipation of A-level results next week, the focus for business and government has to be on making sure that people entering the workforce have the best opportunities to succeed. Businesses need to be prepared to hire staff with potential and invest in their development. We need the government to provide more effective careers advice and encourage people to study the right subjects. And while these changes are feeding through into the jobs market, we need a sensible and balanced approach to immigration so that employers have access to the workers they need.”
Full reports and historical data from the Report on Jobs are available by subscription. Please contact economics@markit.com
The Report on Jobs is a monthly publication produced by Markit on behalf of the Recruitment & Employment Confederation and KPMG. The report features original survey data which provides cross-sector and pan-region analysis of the UK labour market, drawing on original survey data provided by recruitment consultancies.
The Report features original research data from Markit, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2013/14, 1,155,932 people were employed in either temporary or contract work through consultancies and 634,608 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.
All Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.
Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact economics@markit.com.
A regional Report on Jobs series is now available comprising four regional reports tracking labour market trends across the Midlands, the North of England, the South of England and London. The reports are designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.
KPMG
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
About the Recruitment & Employment Confederation
Dorset House, First Floor, 27-45 Stamford Street, London, SE1 9NT. Tel: 020 7009 2100 Website: www.rec.uk.com
The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry.
About Markit
Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on Nasdaq under the symbol MRKT. For more information, please see www.markit.com.
© Copyright in the Report on Jobs, including the Report on Jobs survey data, is owned by Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Markit is a registered trade mark of Markit Group Limited.
*******
For further information, please contact:
KPMG
Zoe Sheppard, KPMG Press Office 0117 905 4337 (t), 07770 737 994 (m) or zoe.sheppard@kpmg.co.uk
REC
Liz Banks / Alasdair Reynolds, REC Press Office, 0207 009 2157 / 2192
Supported by Speed Communications – Kerry Grove kerry.grove@speedcomms.com, 0117 906 4517
Markit Economics (technical/data queries):
Jack Kennedy, Senior Economist, Telephone 01491 461087 / jack.kennedy@markit.com
______________________________________________