Declined pace in permanent placements, candidate shortages and higher salaries

October Report on Jobs

Key Points from the September Survey

  • Permanent placements rise at weakest pace for five months
  • Candidate shortages continue to drive up pay rates

1. Staff Appointments

Growth in permanent staff appointments eases

The number of people placed into permanent job roles continued to increase in September, stretching the current sequence of growth to 14 months. Though solid, the rate of expansion was the slowest recorded since April. Evidence indicated that strong demand for permanent staff across both new and existing clients supported the latest upturn. However, there were some reports that a lack of suitably skilled candidates had weighed on overall growth.

On a regional basis, growth of permanent placements was the most marked in the Midlands and the South of England.

2. Vacancies

Vacancies continue to rise sharply

There has been a further sharp increase in demand for staff. Steep growth of demand was signalled for permanent staff during September.

Other vacancy indicators

Data from the Office for National Statistics (ONS) indicated that job vacancies rose by 3.2% year-on-year in the three months to August. This was down only slightly from a 3.5% increase in the preceding three months.

3. Staff Availability

Availability of permanent staff

The availability of permanent candidates continued to fall sharply in September. Notably, the rate of reduction was the most marked for four months.

The South of England continued to record the steepest drop in permanent candidate numbers, though all remaining UK regions also saw sharp rates of contraction.

4. Pay Pressures

Permanent Salaries

Although the rate of salary growth softened since August, it remained sharp overall. Evidence indicated that a shortage of suitable candidates had placed upward pressure on pay.

The South of England saw the steepest increase in permanent starting salaries of all monitored UK regions, followed by Scotland.

5. Vacancies – Feature

Latest labour market data published by the Office for National Statistics (ONS) indicated that there were 774,000 job vacancies for June to August 2017. This represented an increase of 24,000 compared to the same time last year.

The official numbers back up the strong increases in staff demand. Notably, the ONS data indicated that the number of job vacancies in 2017 have exceeded any level since the series began in 2001. Vacancies broken down by sector revealed that the vast majority of unfulfilled roles (687,000) were in the services sector.


Simon Bean, Managing Director of Recruitment Connection says:

“The above trends highlight that it is becoming increasing difficult to fill vacancies for permanent roles. The shortage of suitable candidates has in turn triggered increased pressure on salaries.”

“The struggle to recruit for permanent places, particularly in the financial sector, resonates throughout the UK; London, however, has been hit the hardest and placements have declined for the first time in eleven months.”

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January’s Job Market Report

January Job Market Report

Key points from the survey:

  • Slower rises in both permanent and temporary staff appointments

  • Permanent salary growth moderates to 26-month low

  • Candidate availability falls at weaker, but still marked, rate


Commenting on the latest survey results, Bernard Brown, Partner at KPMG, said:

“Hiring remained slow but steady during December, with businesses and candidates keen to complete negotiations before Christmas. We are beginning to see a shift away from short term, low risk hiring, with demand for permanent staff outpacing that for temporary workers. This indicates businesses’ confidence is steadily solidifying, leading to an increased willingness to make long term investments in their workforce.”


Growth of staff appointments eases…

The number of people placed in permanent jobs continued to increase in December. After accounting for expected seasonal factors, the index signalled that the rate of expansion remained solid, albeit slower than in November. Panellists commented on rising demand for staff and robust client confidence as factors underpinning the latest increase in placement volumes.

The South posted the fastest growth of permanent staff placements in December, while the slowest rise was seen in London.

Temporary/contract staff billings also increased at a slower pace, with the latest rise also slower than the previous month. Anecdotal evidence from the survey panel linked higher temp billings to rising activity levels at client companies.


…Stronger rise in demand for staff

Vacancies increased at a sharp and accelerated rate in December. Demand for permanent staff continued to rise at a faster pace than that signalled for short-term workers.

The strongest rise was seen for IT & Computing workers with Executive/Professional and Accounting/Financial staff just behind.


Decline in candidate availability eases but still sharp…

The availability of candidates to fill permanent roles continued to decline in December. Although remaining sharp, the rate of deterioration eased since November. Lower permanent staff availability was recorded across each of the four monitored English regions, with the sharpest drop seen in the Midlands.

Temporary/contract staff availability fell further at the end of 2015. Although easing from November’s 18-year record, the rate of deterioration remained considerable. Mirroring the trend for permanent staff, the greatest reduction was seen in the Midlands.


…Pay pressures ease

Salaries awarded to staff placed in permanent jobs increased further in December. However, the rate of growth was the slowest in over two years. Around 21% of panellists reported higher salaries in the latest survey period, compared with approximately 6% that signalled a fall. Those panellists reporting higher salaries generally cited competition for scarce candidates.

Temporary/contract staff hourly pay rates increased at the weakest pace in 21 months.


Feature: Earnings Growth

The UK labour market remained something of an enigma in October. Unemployment fell to a seven-year low but pay growth also eased, once again confounding expectations that a tightening labour market will inevitably drive wages higher. In fact, wage growth is slowing. Average weekly earnings excluding bonuses rose just 2.0% on a year ago in the three months to October, the slowest rate seen since February and down from 2.4% in the three months to September. Even including bonuses, the annual rate fell from 3.0% in the three months to September to 2.4%.

So why isn’t headline pay growth accelerating? It’s not because the average worker who stays in their job feels too insecure to ask for a pay rise. A survey of households in December showed job insecurity at the lowest since data were first collected in 2009. The possible answer is that the renewed weakness of pay growth reflects annual pay reviews that are linked to inflation. With inflation around zero, and even negative in some recent months, it’s not surprising that pay reviews are having a dampening effect on wage growth. However, in some sectors, notably construction where there tends to be a high turnover of staff and where skill shortages are acute, the effect of the tightening labour market is more than offsetting the weakness of annual pay reviews, and average pay growth has accelerated in recent months.


Dec Job Market Report Graph

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The Week in Numbers – 13th January 2016

The Week in Numbers

225 – Number of Investment Advisers Santander expects to employ by the end of Marchblue news

7% – Fall in China’s CSI 300 index on Monday, triggering newly-introduced “Circuit-Breakers” that halted trading for the day

21% – Rise in mortgage approvals year-on-year in November, according to Bank of England Figures

13k – Number of new affordable homes the Government plans to build this year through directly commissioning “small and up-and-coming” building companies

£50k – Amount raised by two landlords seeking to fight Government plans to raise taxes on buy-to-let investments

105,153 – Signatures backing a campaign to ease the transition for women affected by increases in the women’s state pension age (figure correct at time of original writing)

£615m – Amount by which Government has undershot its tax avoidance revenue raising target, according to the Office for Budge Responsibility.

£4m – MAS marketing budget for 2016/17

£30.1m – Budget for “money guidance” in 2016/17, down from £34.1m in 2015/16


“I would be worried if we went back to the bad old days” – Independent pensions expert Alan Higham on the prospect of a return of commission-like charging structures.


Originally published in Money Marketing Magazine 7th January 2016

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The Week in Numbers – 21st December

The Week in Numbers

£6m – Size of FCA fine imposed on Threadneedle Asset Management for allowing a fund manager to book a trade that could have caused a £72m lose to client funds

5 – Number of firms the FCA is considering taking enforcement action against following the findings of a thematic review into wealth managersblue news

0.44% – Charge for the eVestor robo-advice service to be launched next year by Paradigm founding partner Anthony Morrow and co-founder Duncan Cameron

£87k – Size of fine FCXA is seeking to impose on ex-Financial Ltd boss Charlie Palmer for failing to ensure network members gave suitable advice. Palmer has appealed the decision.

20bps – Typical cut to AMCs after Standard Life Investments stopped paying trail on mutual funds. Trail was paid at either 25 or 50 basis points.

3 Months – Period ex-Openwork chief executive Mary-Anne McIntyre spend as Chief distribution officer at Old Mutual Wealth

£50m – Government estimate on the level of increased costs faced by employers and pension schemes due to the lifetime allowance cut from £1.25m to £1m in April.


We could have taken Commission upfront and filled our boots” – Almary Green managing director Carl Lamb hits out at firms considering stopping trail commission on a non-platform basis.

Originally Published in Money Marketing Magazine 17th December 2015
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Employment Legal News Update

Legal News From the IRP:

The Department for Business, Innovation and Skills (BIS) published the five year summary of the Lord Davies (Women on Boards) Review

The report originally set out to address the lack of women on corporate boards (only 12.5% in 2010) and to examine the obstacles preventing women from reaching these senior positions. It made recommendations as to how the imbalance should be addressed. One of the recommendations was for FTSE 100 companies to aim to have at least 25% female representation on corporate boards by 2015. There is an annual review of progress against each of the recommendations and this report is the fifth annual summary.

The report includes a finding that FTSE 100 companies have now achieved 26.1% female representation on corporate boards, with FTSE 200 companies achieving 19.6%. Also, whereas in 2011, 152 FTSE 100 companies had no women on their boards, there are now no all-male boards and only 15 in the FTSE 250 companies.

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The Week in Numbers – 14th December

The Week in Numbers

9% – Annual rise in house prices in the three months to November, down from 9.7% in October, according to Halifaxblue news

£20K – New minimum capital adequacy requirement for advice firms. It was previously £10,000.

0.3% – Expansion of Eurozone GDP in Q3 2015, compared to Q2, according to estimate by Eurostat

25% – Shares in Clydesdale and Yorkshire Bank to be sold in an IPO by parent NAB. The remaining shares will go to existing investors.

15,100 – Number of new complaints relating to investments and pensions, the FOS forecasts for 2015/16

£611bn – Combined assets of M&G, Schroders and St James’s Place, which are all set to leave the Investment Association.

£600m – Expected valuation of national advice firm Towry, which is up for sale after it abandoned plans to float on the stock market.

6 – Number of months by which the Government has extended the Lloyds share sale. The Treasury will sell shares to institutional investors until 30th June 2016, subsequently opening up to retail investors.

“I find it hard to believe everybody who is acquired is moving to a place that is better than where they were” – Gbi2 managing director Graham Bentley on suitability concerns in the advice consolidation market.


Originally published in Money Marketing Magazine 10th December 2015

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December Job Market Report

Key points for December:

  • Permanent and temporary appointments both increase at sharper rates
  • Candidate availability tightens further
  • Pay growth remains marked


Faster growth of staff appointments

The number of people placed in permanent jobs increased further in November. The rate of growth was marked, having accelerated to the sharpest since April. Higher placements were recorded at around 38% of panellists, compared with approximately 27% that noted a decline. Anecdotal evidence from recruiters pointed to increased confidence and higher activity levels at client companies.

Growth of permanent placements was broad-based across the monitored English regions during November, with the fastest rate of expansion signalled in the North.


Vacancy growth eases but still strong

Demand for staff continued to rise in November. Although easing to a 29-month low, the rate of expansion remained marked overall.  The data also signalled that demand for staff remained considerably stronger in the private sector than the public sector.

Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 5.3% on an annual basis in the three months to October. That was the slowest growth in three years.


Candidate availability falls at sharper rate

The availability of staff for both permanent and temporary/contract roles fell at sharp and accelerated rates in November with around 44% of panellists reporting a reduction versus less than 7% indicating a rise. All four English regions saw lower levels of permanent staff availability during the latest survey period. The sharpest falls were signalled in the South and London. Shortages of candidates for a range of skill-sets were reported by panellists.

All nine categories of permanent staff registered increased demand in November. The strongest growth was reported for IT & Computing workers, closely followed by Accounting/Financial and Executive/Professional staff.


Pay growth remains marked

Permanent staff salaries continued to rise in November. The latest increase was again strong, with panellists citing competition for qualified staff. Temporary/contract staff hourly pay rates rose at the fastest pace in three months, although growth remained slower than that seen for permanent employees.

Around one-quarter of panellists noted higher salaries, which they attributed to rising demand and shortages of qualified candidates. Higher salaries were indicated in all four English regions; with the Midlands posting the strongest increase overall.


Feature: Labour Market Tightness

Latest data from the Office for National Statistics (ONS) highlighted a further tightening of UK labour market conditions. The unemployment rate fell to 5.3% in the three months to September, down from 5.4% in the three months to August – the lowest since early-2008.

The actual number of people in unemployment fell by 103,000 in the third quarter compared with the previous quarter. That was the largest drop for a year and left overall unemployment at 1.749 million, the lowest in over seven years.

There are now just 2.4 unemployed people per vacancy, down from a peak of 5.9 four years ago. The current level of the vacancy ratio has in the past been consistent with stronger rates of pay growth than are currently being witnessed, suggesting that an increase in the rate of salary growth may be in store.

Nov Job market report graph

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The Week in Numbers – 10th December

The Week in Numbers

£5m – Potential annual increase in advisers’ FSCS levies if the FCA pushes aheadblue news with plans to expand the scheme

13% – Fall in assets under management at Aberdeen following outflows from the group’s flagship emerging markets equity funds

£16m – Paper loss made by Neil Woodford on investment in Northwest Biotherapeutics. Woodford has called for an ex-FBI agent to be appointed as non-executive director

3% – Amount more in stamp duty buy-to-let landlords will have to pay compared to residential buyers following Autumn Statement

£840m – Amount the Government will save following delays to two planned rises in minimum contribution rates under auto-enrolment

£150k – Current compensation limit for FOS claims. The FCA last week suggested the limit may need to be raised

£72m – Fine handed out to Barclays by the FCA for failing to minimise the risk the bank could be used to facilitate crime


“We need more advisers and something will have to be done to look at where those people are coming from” – Apfa director general Chris Hannant on the first significant upward trend in adviser numbers since the RDR.


Originally published in Money Marketing Magazine 3rd December 2015
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The Week in Numbers – 30th Nov

The Week in Numbersadmin chart

5 – Number of organisations that should merge to become a single trade body, according to a review chaired by former Ofcom chief Ed Richards. The list includes the CML and the BBA

£3.7m – Amount in Hargreaves Lansdown shares sold by investment marketing director Ian Hunter

99 – Number of companies that have defaulted on their debt this year, according to Standard & Poor’s. Global defaults are at their second-highest level in a decade

£4tn – Amount the Government plans to spend over the course of this Parliament

3 mins – Average time spent by consumers on the Pension Wise website

7 years – Length of time but-to-let lender CHL Mortgages has been out of the market. It is understood it will start lending again early next year

20,000 – Number of RBS branch staff who will have their cash bonuses scrapped under plans to reduce misspelling risks

£119.30 – New weekly state pension following a 2.9% increase


Quote of the week: “Issuing new staging dates to people who have already had them would cause mayhem” – Former pensions minister Steve Webb on the risks of delaying auto-enrolment for small firms.


Originally Published in Money Marketing Magazine 26th Nov 2015
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The Week in Numbers – 17th November

The Week in Numbers – 17th Novemberblue news

24% – Proportion of calls not answered by HMRC staff. MPs have criticised the tax office’s performance calling it “completely unacceptable”

£500 – Amount each new employer using The People’s Pensions for auto-enrolment will be charged in 2016

9 – Number of insurers on the Financial Stability Board’s “Too big to fail” list. Dutch insurer Aegon replaced Generali last week

400 – Number of advice firms and providers approached by the FCA for a data-gathering exercise to inform the Financial Advice Market Review

£10K – Compensation awarded by the Pensions Ombudsman to an Abbey Life customer who was made aware of a guaranteed annuity rate

£5bn – Outflows in the year to September at Prudential-owned asset manager M&G

£100m – Investment in film partnerships by Kingsbridge Asset Management on behalf of clients, including former England Footballers

£733,794 – Payout minus bonus and redundancy payment Partnership chief executive Steve Groves will receive when the provider merges with Just Retirement


Quote: “If we didn’t have Pension Wise, everyone would just go to their provider, and we know what they are like” – Pensions minister Ros Altmann argues it is in advisers’ and consumers’ interests to boost the take-up of guidance


Originally published in Money Marketing Magazine on 12th Nov 2015
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