Key points from the February survey:
- Permanent placements increase at quickest pace in three months
- Permanent salaries rise at stronger rate but temp pay growth eases
Commenting on the latest survey results, REC chief executive Kevin Green, said:
“The UK labour market is at a critical juncture. Permanent hiring improved last month, demand for staff remains strong, and pay is going in the right direction – but serious threats are looming just around the corner.
“Next week the Chancellor will announce his plans for the coming financial year, at a time when recruiters across the country are reporting serious skills shortages alongside buoyant jobs growth. Now is not the time to put up additional hurdles that could throw the jobs-rich recovery off course.
“The introduction of the National Living Wage on April 1st, closely followed by tax changes on April 6th, will disrupt hiring strategies for many businesses. Employers will seek to offset rising wage bills, for example by scaling back recruitment and increasing automation. This could weaken future demand for staff.
“In June, the EU referendum carries a very real risk that business confidence will be curtailed and investment in hiring could falter. It’s vital that we have an informed debate about the impact the referendum might have on jobs, both in the short and long term. All parties must remember that UK employers need access to the global labour market in order to thrive.
“Global economic headwinds only add to the uncertainty around what the months ahead hold, and the Recruitment and Employment Confederation calls on the government to avoid further destabilising the UK jobs market in next week’s Budget.”
Permanent placements growth at three-month high:
February data pointed to a further increase in permanent staff placements. The rate of expansion quickened slightly, reaching a three-month high.
Stronger rise in demand for staff:
The level of available job vacancies continued to rise in February. The rate of growth was marked and the fastest in six months. Demand for permanent staff continued to show a stronger trend than that for temps.
Slower fall in candidate availability:
The availability of staff for both permanent and temporary/contract roles continued to decline in February. However, rates of decline eased in each case to the slowest in at least two years.
Sharper increase in permanent salaries:
Starting salaries for successful permanent candidates rose at the fastest pace in three months during February. However, temp pay growth eased, hitting a 33-month low.
Employment rate and vacancies hit record highs:
The UK employment rate and number of job vacancies have risen to record highs, according to latest data from the Office for National Statistics (ONS).
At 74.1%, the employment rate is highest since comparable records began back in 1971. The number of employed now stands at 31.42 million, also a record.
There were 776,000 unfilled job vacancies in the three months to January, the highest since the series began in 2001. With only 1.69 million people unemployed, the jobless to vacancy ratio is the lowest for a decade.
The growth in employment was driven by rises in both employees and the self-employed, while 88,000 of the increase was attributable to previously inactive people returning to the labour market.
This blog has been written with thanks to The Report on Jobs, a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation.