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Growth in Permanent Placements Reaches One-Year High

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The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Stronger growth of permanent staff placements

Growth in permanent placements picked up from January’s recent low to reach a one-year high in February. In contrast, temp billings increased at the softest pace in four months.

Demand for staff reaches 18-month peak

Job vacancies continued to increase in February. Overall, demand for staff rose at the quickest rate in one-and-a-half years, with both permanent and temporary workers seeing faster increases.

Candidate availability declines at faster pace

The availability of staff to fill job vacancies declined sharply in February. Both permanent and short-term candidate supply deteriorated and to a greater extent than at the start of the year, with the former noting the steepest rate of reduction.

Sharper increase in salaries

Starting salaries for candidates placed into permanent roles increased at the quickest pace since March 2016 in February. Meanwhile, temp pay growth picked up slightly from January and was the second-fastest seen in nine months. 

Regional and sector variation

Data split by region indicated that permanent placements increased across all four English regions in February, while Scotland saw the first expansion since September 2016.

Continuing a trend that has been evident since last October, agencies based in the North of England saw the quickest increase in temp billings.

Private sector demand for staff remained substantially stronger than that for public sector staff in February. Furthermore, demand for permanent staff at private sector firms reached a 20-month high, while vacancies for temporary roles in the sector also increased sharply.

Meanwhile, public sector demand rose modestly for both permanent and temporary staff in February.

Demand rose for all permanent job categories in February, with the strongest increases seen for Engineering, IT & Computing and Nursing/Medical/Care staff. Though marked overall, demand for permanent roles was weakest in Hotel & Catering.

Engineering was the most sought-after category for temporary/contract staff in February, closely followed by Nursing/Medical/Care and Blue Collar. The slowest growth was seen for Executive/Professional.

REC Chief Executive Kevin Green says:

“Although permanent placements have hit a 12 month high, businesses across the UK are finding it increasingly difficult to recruit for permanent roles. The big question still remains about how employers will fill their vacancies.

“The Chancellor is expected to announce a boost for vocational training in today’s budget and this is very welcome. However, it won’t solve the immediate need for people to fill jobs. We’re already seeing acute staff shortages in a variety of sectors, from healthcare to engineering. This is likely to get worse, especially if the Government continues to refuse the rights of EU citizens living in the UK post-Brexit.

“On the flip-side, this is a good time for individuals prepared to move jobs, with bumper pay offers on the table as hirers compete to secure the talent available. In the context of rising inflation and stagnating pay growth, changing employers is becoming a more attractive option for those looking for more money.”