Report on UK Jobs – December 2021

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 trends in the UK jobs market.

The main findings for December are:

Hiring activity continues to rise sharply

Recruitment consultancies registered further substantial increases in both permanent placements and temp billings at the end of 2021 amid reports of robust demand for staff and greater client requirements. Permanent placement growth continued to outpace the upturn seen for temp billings.

Vacancy growth slips to eight-month low

December survey data signalled a further easing in the rate of total vacancy growth across the UK. The latest increase in demand for staff was the softest seen since April, albeit rapid overall. Softer increases in vacancies were signalled for both permanent and temporary roles.

Recruiters signal least severe drop in candidate numbers since April

The supply of overall candidates continued to fall sharply during December, but the rate of deterioration eased for the fourth month running. Notably, the latest drop in candidate supply was the least severe since April. Nonetheless, recruiters noted that uncertainty around the pandemic and the economic outlook, a generally low unemployment rate and fewer foreign workers had weighed on candidate numbers.

Shortages continue to push up rates of starting pay

Starting salaries for permanent workers and temp hourly pay continued to rise rapidly in December, with the respective rates of inflation holding close to record-highs. Panellists frequently mentioned that starting salaries and wages had risen as demand for staff continued to outstrip supply.

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

“The UK jobs market rocketed to near historic levels as New Year approached. That’s despite it losing a little fizz with the pace of accelerating demand for staff, wage and salary growth and vacancies all easing slightly. Employers in all sectors haven’t lost their appetite to hire, but many will be frustrated by the pressure these inflationary and competitive conditions, which are likely to continue for some time, are putting on their operating costs and ability to expand. The data show that the availability of staff is particularly pressing in the health and care sector, where demand for qualified personnel is running far hotter than availability of permanent and temporary candidates to fill roles. This has been exacerbated by Omicron, through sickness to workers and the need to self-isolate. The availability of workers is testing the resolve of employers across the economy and will likely cause distortion in recruitment patterns as businesses shift focus from long-term growth to short-term cover. However, we shouldn’t underestimate the business community’s ability to adapt to these new conditions and look to training and technology solutions to find a way forward.”

Neil Carberry, Chief Executive of the REC, said:

“2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue. This survey shows again how tight the labour market was at the end of last year. Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling. These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021. Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce. Recruiters are ideally positioned to help employers with this, and support governments across the UK on the skills, immigration and tax reforms that are needed to keep us competitive.”