Firms are finding it increasingly difficult to find people to fill vacant roles and salaries are being forced up as a result.
According to the latest REC/KPMG report on jobs, a record decline in the number of people looking for permanent work was reported in July. The rate of decrease has accelerated to its highest point in the 17 years the survey has been running.
The lack of suitable talent has increased starting salaries for people in full-time roles. The trend has been underway since 2012 and the rate of increase was only fractionally below June’s survey-record high.
Which Regions Fared Better?
While all four English regions covered by the survey registered higher permanent placements in July, the sharpest growth was found in the South.
The Midlands had the strongest expansion of temporary billings during the latest survey period, with growth there considerably faster than in the other regions.
Is Economic Recovery to Blame?
Kevin Green, chief executive of REC said the survey indicated that economic recovery was now bring its own set of problems that the industry now needed to address.
“The jobs market continues to go from strength to strength with a further increase in the number of people finding new jobs last month, and both starting salaries and hourly pay rates continuing to grow,” he said.
“The UK’s post-recession problem is skill and talent shortages. The economy is going to be constrained by this ongoing talent crisis if employers keep doing business as usual.”
Good News for Candidates
He added that that over a third of recruiters reported they secured higher salaries for candidates they placed into permanent jobs in July, than for the equivalent roles in June.
The report also found that workers in the construction industry were most sought after by firms looking for permanaent employees. Engineers and medical staff followed this.
“The demand for staff in UK construction shows the industry is rising out of the recession. But without more people skilled, available and willing to take jobs as site managers, joiners and electricians we can’t build the new homes and infrastructure that this country desperately needs,” said Green.
According to Bernard Brown, partner and head of business services at KPMG the uptick in the economy is giving people new confidence in looking for work.
“For the first time in months we are witnessing churn in the labour market. It seems that employees are finally beginning to wake up to the opportunities available to them, with the rates of growth of both permanent and temporary placements accelerating simultaneously for the first time since the winter,” said Brown.
“Perhaps it’s true that ‘every person has their price’ because the movement in labour is coinciding with another rise in starting salaries. Just a few months ago employers couldn’t tempt staff to switch roles, but indications are that employees’ caution over change is being replaced with hunger for something new.”