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 UK job market trends.
The main findings for January are:
Recruitment activity continues to rise sharply at start of 2022
The easing of pandemic restrictions, improved market confidence and strong demand for workers drove a further steep increase in recruitment activity across the UK during January. Permanent placement growth remained sharp, despite easing to a three-month low, while temp billings expanded at the quickest rate since last August.
Starting salary inflation remains close to record pace
Robust demand for staff and candidate scarcity drove up rates of starting pay for both permanent and temporary staff at the start of the year. Starting salaries rose at the third-sharpest rate on record (since October 1997), beaten only by those seen last October and November. Temp wage inflation also remained rapid, despite the pace of increase easing to a seven-month low.
Quicker fall in overall supply of candidates
The rate of decline in overall candidate availability quickened for the first time in five months in January. Though not as steep as those seen during last summer, the rate of deterioration remained substantial overall. The downturn was driven by a quicker drop in permanent staff supply, as temp candidate numbers fell at a softer pace.
Vacancy growth eases, but remains historically sharp
Demand for staff continued to rise at a historically sharp pace in January, despite growth of overall vacancies edging down to a nine-month low. Underlying data showed that the softer upturn was due to a weaker rise in permanent staff demand, as short-term vacancies expanded at a quicker rate.
Commenting on the latest survey results, Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said:
“The new year has seen the jobs market continuing where it left off, with a steep climb in permanent and temporary hiring. Meanwhile, a sustained decline in the number of suitable candidates has pushed starting salaries up for yet another month. It will be important to monitor how these dynamic features of the job market respond to the competing pressures being felt by both businesses and candidates – the desire to make the most of the reduction in Covid restrictions on the one hand; and the understandable concern over the cost of living and inflationary rises on the other. Some sectors are continuing to show the strain of high demand for permanent and temporary roles. In particular, the IT and Computing, and Nursing, Healthcare and Medical sectors saw the greatest vacancy increases for yet another month, reflecting the significant workforce and skills challenges which these sectors have faced, and which the pandemic has accelerated.”
Neil Carberry, Chief Executive of the REC, said:
“The jobs market is still growing strongly at the start of 2022. Recruiters are working hard to place people into work as demand from employers continues to rise. With competition for staff still hot, companies are having to raise pay rates for new starters to attract the best people. And the cost of living crisis means there is also more pressure from jobseekers who want a pay rise. But pay is not the only important factor – companies must think about all aspects of their offer to candidates to ensure they get the staff they need. This will be important as firms’ spending is under pressure from inflation as well. Government’s role is to manage inflation, but also to ensure that they do not discourage investment – that is what will drive the economy to grow through this year. Now is the wrong time to be raising National Insurance, the biggest business tax. But politicians should also be thinking about longer-term workforce planning, making sure we have the skills the country needs for the future. This will take a collaborative effort between the public and private sectors, and the recruitment industry stands ready to help.”