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REC Report on Jobs: Temp Salaries Rise at Fastest Rate Since 2007

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The KPMG and REC, UK Report on Jobs is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. 

Recruitment & Employment Confederation chief executive Neil Carberry said:

“Today’s report backs up what recruiters across the country are saying to us. High employment rates and a lack of willingness to change employer in this uncertain climate means fewer people are looking for jobs – despite rising pay and jobs being available.

“After a long run of strong performance, it seems that employers are getting more nervous as well. Although permanent and temporary placements continued to increase, the pace of growth has slowed since earlier in the autumn.

“Recruiters across the country are working hard to fill gaps in our labour market but in the run-up to Christmas, sectors like hospitality and warehousing are facing particular challenges as they ramp up to the festive season. More clarity on the future path of Brexit and immigration will underpin business and consumer confidence, ensuring the UK’s jobs performance remains strong.”

Slower rise in staff appointments

Permanent placements and temporary billings both increased at softer rates in November. Though strong, the upturn in permanent staff appointments was the second-weakest since October 2017, while temp billings expanded at the joint-weakest rate for just over two years.

Vacancy growth edges down to 25-month low

Though elevated by historical standards, the overall rate of vacancy growth edged down to the least marked for just over two years in November. This was driven by a slightly softer increase in permanent job openings, as temp vacancies rose at a fractionally faster pace.

Candidate availability continues to tighten…

The overall availability of staff continued to decline sharply in November. This was despite the rate of reduction easing to the weakest since March, helped by softer falls in the supply of both permanent and temporary candidates.

…leading to further upward pressure on pay

Tight labour market conditions and greater competition for workers led to further marked rises in pay for both permanent and temporary staff. Notably, temporary wages increased at the quickest rate since July 2007. Permanent starting salaries meanwhile rose at one of the sharpest rates seen in the past three-and-a-half years.

Regional variation

Steep increases in permanent staff appointments were seen across three of the four monitored English regions, as the North of England registered only a modest rate of expansion.

The upturn in temp billings was broad-based across all four monitored English regions. The Midlands saw by far the quickest rate of growth, while relatively modest expansions were registered elsewhere.

Sector variation

November data pointed to rising demand for both private and public sector staff, though growth remained sharper for the former.

The strongest increase in vacancies was seen for temporary private sector staff, closely followed by permanent workers in this sector.  In the public sector, short-term vacancies rose sharply, while demand for permanent staff expanded modestly.

IT & Computing led a broad-based expansion of demand for permanent workers during November, closely followed by Engineering. Nonetheless, marked increases in vacancies were also seen in the remaining eight monitored categories.

All ten monitored temporary/contract staff categories noted increased demand during November. Blue Collar registered the steepest rise in vacancies, while the softest was seen for Executive/Professional.