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Upturn in hiring activity slows again amid candidate shortages
by Susie Hughes at 13:17 12/04/22 (News on Business)
The latest KPMG and REC, UK Report on Jobs survey highlighted softer rises in hiring activity during March, as candidate shortages restricted growth of both permanent placements and temp billings.
Nonetheless, expansions remained sharp by historical standards, fuelled by a further steep increase in demand for staff. The availability of candidates to fill roles continued to fall sharply, however, with overall staff supply dropping at the quickest rate for four months.

The imbalance of labour supply and demand drove further substantial increases in rates of starting pay, with salaries for new permanent joiners rising at the quickest rate on record in March.

Latest survey data pointed to softer expansions in both permanent staff appointments and temp billings across the UK in March. Though elevated by historical standards, rates of increase fell to 12- and 11-month lows, respectively. Recruiters frequently mentioned that candidate shortages continued to weigh on their ability to fill vacancies.

The overall availability of workers in the UK continued to fall rapidly at the end of the first quarter. Notably, the rate of contraction was the steepest seen for four months, with a slightly quicker drop in permanent candidate numbers offsetting a softer fall in temp labour supply. Panellists often mentioned that a generally low unemployment rate, uncertainty related to the pandemic and Ukraine war, fewer EU workers and robust demand for staff had limited worker availability.


Recruitment consultancies signalled a further increase in permanent starting salaries in March. Moreover, the rate of inflation was the sharpest in 24-and-a-half years of data collection amid reports of intense competition for staff. Average wages for temp workers also rose in March, and at a rapid pace that was the quickest for three months.

Overall vacancies rose for the fourteenth month in September. Recruiters indicated stronger rises in both permanent and temporary staff demand in the latest survey period, with the former noting the steeper rate of growth.

The Midlands registered the sharpest increase in permanent placements of all four monitored English regions. The softest, but still marked, expansion was seen in the South of England. All four monitored English regions noted marked upturns in temp billings at the end of the first quarter, led by London.

Vacancies rose across both the private and public sector at the end of the first quarter. The strongest expansion in demand was signalled for permanent staff in the private sector, while the softest increase in vacancies was seen for permanent staff in the public sector.

As has been the case in each of the prior four months, IT & Computing recorded the steepest increase in demand for permanent staff of all ten monitored sectors in March. The softest, but still sharp, rise in permanent vacancies was seen in Retail.

March survey data also pointed to a broad-based increase in temporary staff demand, with Hotel & Catering topping the rankings. As was the case for permanent vacancies, the slowest increase in short-term roles was signalled for Retail.

Neil Carberry, Chief Executive of the REC, said: “We can clearly see that labour and skills shortages are driving inflation in these latest figures. Starting salaries for permanent staff are growing at a new record pace, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices. Record COVID infection levels are also pushing up demand for temporary workers, particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates.

“However, the overall number of placements being made is starting to stabilise. This is no surprise after a period of historically high growth, and in the face of more economic uncertainty. Even so, the jobs market is very tight. Businesses will need to broaden their searches and be creative in making their offer to candidates more attractive, in consultation with recruitment experts. But Government can help by incentivising investment in skills and people during the inflation crisis.”

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Susie Hughes © Shout99 2022

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