The Report on UK Jobs is unique in providing the most comprehensive guide to the UK jobs market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends.
The main findings for May are:
Unprecedented increase in permanent placements as more parts of UK economy reopen
Improved market confidence amid a further reopening of the UK economy contributed to the sharpest increase in permanent placements in over 23-and-a-half years of data collection in May. Temp billings also rose rapidly, expanding at the quickest rate for more than six years.
Demand for staff rises at near-record pace
May survey data also highlighted a sharp and accelerated rise in vacancies, with the latest upturn the most marked since January 1998. Substantial increases in demand were signalled for both permanent and temporary staff, with the former seeing the slightly steeper rate of growth.
Staff availability deteriorates rapidly
The decline in total candidate availability gathered pace midway through the second quarter. The latest reduction in overall staff supply was the most severe for four years and rapid, with both permanent and short-term candidates falling at substantial rates. Lower worker availability was frequently linked to lingering pandemic uncertainty and a subsequent reluctance to seek out new roles, fewer EU candidates and furloughed staff.
Steeper increases in starting pay
Greater demand for workers and a generally low supply of candidates pushed up rates of starting pay again in May. Starting salaries
for permanent staff rose to the greatest extent since September 2018, while temp wage inflation hit a near two-year high.
Commenting on the latest survey results, Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, said:
“With demand for workers in May increasing at the fastest rate in 23 years, the jobs market seems to be firing on all cylinders, and we need this momentum to continue for our economy and businesses to fully bounce back. But the deterioration in staff supply intensified this month, with overall candidate availability declining at the quickest rate since May 2017. This is a worrying trend and the message is clear: we need businesses and recruiters working alongside Government to urgently address the skills gap by supporting candidates and employees to upskill and reskill to move into new roles. This will be crucial to our recovery from the pandemic and the levelling up of opportunities across the UK.”
Kate Shoesmith, Deputy CEO of the REC, said:
“We now have a consistent picture over the past few months to show that confidence is growing and hiring plans are in motion. The data is mirroring exactly what recruiters tell us daily. Permanent placements are growing at the fastest pace we’ve ever seen, and temp billings at the quickest for six years. So now is the time for action. With demand spiking, the skills and labour shortages that already existed in the UK have come into sharper focus – and COVID has only made them worse. This is the most pressing issue in the jobs market right now, and has the potential to slow down the recovery. Employers must think about how they can attract the staff they need, for example by looking at the wage and benefits package on offer – there is particular demand for more flexible and hybrid work. But government also needs to urgently look at improving access to work and opportunities for everyone to participate in training that will lead to a job. This should start with careers information that signals where job openings are being created and funding for the relevant work-related training.”