Report on UK Jobs – February 2022

Report on UK Jobs

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 job market trends.

The main findings for February are:

Softer, but still rapid increase in hiring activity

UK recruitment consultancies recorded a further robust increase in hiring activity during February amid reports of rising workloads at clients and greater confidence in the outlook. That said, permanent placement growth eased to an 11-month low and temp billings also expanded at a softer pace, with recruiters frequently stating that candidate shortages had limited their ability to fill roles.

Candidate supply falls at quickest rate for three months

The total availability of candidates fell at the sharpest rate since last November in February, driven by steeper falls in both permanent and temp staff supply. Lower candidate numbers were generally attributed to ongoing tight labour market conditions and robust demand for staff. There were also reports that the pool of candidates was limited due to lingering pandemic-related uncertainty and fewer foreign applicants.

Vacancy growth accelerates for first time since last July

Overall vacancies expanded at the quickest rate for three months in February. This marked the first acceleration of growth since last July, and was driven by sharper rises in demand for both permanent and temporary staff.

Pay pressures sharpen in February

Recruiters continued to see intense competition for workers in February, leading to further steep increases in rates of starting pay for both permanent and short-term staff. Notably, permanent starters’ salaries rose at the second-sharpest pace since data collection began in October 1997.

Commenting on the latest survey results, Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said:

“While recruitment activity has slowed slightly, employers across all sectors continued to hire energetically during February, as their workloads increased and vacancy growth accelerated for the first time since last summer. But the lack of suitable candidates continued and fuelled yet further increases in starting salaries. The IT sector led the increase in demand for permanent staff, with hotel and catering close behind, possibly reflecting the reduction in pandemic measures across society. A sustained focus on skills shortages is required if all sectors of the economy are to leave winter behind and head into spring with confidence in the jobs market.”

Neil Carberry, Chief Executive of the REC, said:

“Candidate availability has now been dropping for a year, which shows the scale of the labour shortage the UK faces. Recruiters are filling record numbers of posts, but demand is still rising. Those firms that are meeting their needs are working more collaboratively with their recruiters to get their offer to candidates right. Meanwhile, government can help by working with business to support people back into the labour market and address skills gaps. At a time when firms and workers are hard-pressed by inflation, making sure businesses can invest in wages and training matters. Ramping up National Insurance is not the right way to go.”