Latest market news: High demand for staff but low candidate Availability

 Key points from the March Survey:

  • Permanent placements continue to rise;
  • Growth of demand for staff remains high, but candidate availability drops lower;
  • Starting salaries increase to greatest extent for five months.

Growth in permanent placements…

Although the rate of expansion has softened from February’s three-year record high, the growth in permanent placements remains sharp. Permanent placements vacancies continue to rise at a slightly faster pace than that for temporary job roles.

Candidate availability...

The availability of permanent workers has fallen for the fifty-seventh consecutive month in March. Key permanent staff skills reported in short supply includes in particular Accountants, Engineers, HGV Drivers and Web Developers.

Pay pressures…

The rate of inflation in salaries for newly-placed permanent staff has accelerated for the second month running in March. Evidence suggested that the higher salaries are attributed to strong demand for staff alongside competition for scarce numbers of candidates with the required skills for the roles. Data published by the Office for National Statistics shows improved earnings growth in its latest report. Alongside a softer increase in living costs, this suggests that the pressure on real wages may be coming to an end.

Commentary:

Permanent placements are growing month on month as demand for staff remains high. More people are entering employment, but it doesn’t make up for the shortfall of candidates for many roles, from cyber security and aerospace through to sewing machinists and drivers.

As a result, employers are increasing starting pay to draw candidates away from current roles into new positions. 

Candidates planning to move jobs have a strong chance of getting a pay rise. With inflation outstripping pay growth for over a year now, high pay offers will be tempting, as the pressure on starting salaries still isn’t translating into pay rises for staff who stay put. Employers need to look at other means to keep staff, such as creating a good workplace culture and offering progression opportunities.

 

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Inflation Remains at a Record High Amid Candidate Shortages

Key Points from the February Survey:

  • Softer rise in permanent placements
  • High levels of candidate shortages amid high starting salaries
  • Softer rise in staff vacancies

Softer rise in permanent placements…

The number of people placed in permanent jobs increased in February although at a slower rate than January’s recent high. The continued increase has  been attributed to a strong demand for staff and a greater willingness among candidates to take up new roles

Decreased demand for staff…

The demand for staff for permanent positions has risen at its slowest pace in fourteen months.

Availability of staff…

The availability of staff for permanent roles continued to decline in February.

Pay Pressure…

Salaries for permanent starters have increased further in February and the rate of inflation remains at a record high. The higher salaries have been attributed to higher candidate and skill shortages amid rising vacancies.

 

 

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Is it legal to ask about mental health in job interviews?

Mental health can be a difficult subject for employers and candidates to bring up and discuss although it’s much more open now than ever before. Many organisations are afraid of legal repercussions if they ask too soon or fail to ask at all.

Is it legal to ask employees about their mental health during a job interview?

Generally, no, this would not be legal.

Employers should make all efforts to avoid any questions relating to health at the interview stage, particularly in relation to mental health. The main reason being if you do ask the question and the candidate discloses that they have an issue, there is then a very high risk that if that candidate is then rejected for the role, they will link that to the disclosure of their health condition and make a claim for discrimination.

Are applicants legally obliged to disclose mental illness during an interview?

No, a candidate does not have to mention any medical condition during a job interview. Even if asked, there is no obligation to answer the question.

Are they legally obliged to then disclose it if they are offered the job?

An organised employer will provide a health questionnaire once a job offer has been made and accepted. The purpose of this form is to see if the incoming employee suffers from any medical condition(s) which could affect their ability to perform the role, and which could warrant adjustments being made to assist them in their role. A simple example could be an employee with ongoing back problems that may need a special chair or someone with vision problems who needs a larger computer screen.

Is it breaking the law if they do not disclose mental illness and then need to take time off as a result?

It would not be breaking the law, but you do have to be careful. If an employee states in the health questionnaire that they don’t have any medical condition(s) which would affect their work and then takes considerable time off due to an ongoing condition, there is an argument that they have not been truthful. An employer could pull them up on this. If, however, your absence is very limited this should not be a concern.

What can employers do to make their workplaces more mental health-friendly if an ideal candidate does have such issues?

There are many things that can be put in place to help support employees with mental health problems, enabling them to stay in work. If the employee has been honest regarding their mental health then there are options that an employer can take such as flexible working, adjusting the workload or extending deadlines, where possible, to reduce the pressure that they are under.

If employees do not disclose mental illness, however, then it can make it harder for their employers to support them in a timely manner for example, if their work is suffering as a result of declining mental health but the employer is not aware they will just think that the work is not up to standard and take steps relating to that.

What piece of legislation are applicants’ and employees’ rights protected under?

The Equalities Act 2010 provides protection in the workplace from both direct and indirect discrimination on account of certain protected characteristics. This includes gender, age, race or disability. Mental health falls under the disability category. Section 6 states that a person has a disability if they have a physical or mental impairment which has a substantial and long-term adverse effect on the person’s ability to carry out normal everyday activities. Section 39 details the exact discrimination which an employer is prohibited to conduct against an applicant/current employee. This includes the prohibition of an employer to discriminate against a person as to the terms which the he offers that person employment. Section 120 states that an employment tribunal has the jurisdiction to handle complaints relating to such discrimination in the workplace.

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Market update: Salary inflation hits 31 month record!

Key Points

  • Strong rise in recruitment
  • Starting salary inflation hits 31-month record alongside lack of candidate availability;
  • Growth of demand for candidates declines slightly but still remains high.

Sharp Increase in Permanent Placements

Permanent placements have continued to rise each month for the past year-and-a-half. This growth has been linked to a greater demand for staff, although some panellists suggest that improved decision-making has also been a factor.

Increase in vacancies:

Overall demand has continued to rise in January.

Availability of Permanent Staff:

The number of available permanent candidates has continued to deteriorate in 2018. Key permanent staff skills reported in short supply includes paraplanners.

Higher Starting Salary Inflation:

Starting salaries for successful permanent candidates has increased at the fastest pace for over two-and-a-half years.

UK Unemployment Rate in Context:

The UK employment rate is at a four-decade low of 4.3% which is below the EU jobless rate of 7.3%. The jobless rates are higher in Austria (5.4%) and the Netherlands (4.4%), but lower in the US (4.1%), Germany (3.6%) and Japan (2.7%) in comparison to the UK.

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Recruitment news Jan 2018 – Permanent recruitment continues to rise at an increasing pace

Key Points from the December Survey:

  • Permanent placements continue to rise at an increasing pace;
  • Pay inflation remains high alongside a further decrease in candidate availability;
  • Demand for staff softens but remains historically strong.

Permanent Placements

Permanent staff placements have increased at the quickest pace since August. This has resulted in a higher number of people placed in permanent job roles for the seventeenth month running in December.  Key permanent staff skills reported to be in short supply esp paraplanners but also in construction and engineering.

Staff Availability

There has been an accelerated and steep drop in permanent candidate numbers. The rate of deterioration is the fastest recorded over the past two years.

Permanent Salaries

The trend of higher starting salaries for permanent jobs has continued into December. Although the pace of inflation softened for the third month in a row, growth remained sharp overall.

Demand for Staff

Although there has been an easing in the rate of expansion of demand for staff, the rate of growth has remained sharp and above the series average.

Employment

Latest statistics reveal that 32.08 million people were in work in the three months to October. Although this was 56,000 fewer than in the prior three months, this showed an increase of 325,000 compared to the same period in 2016.

Commentary: The number of people finding jobs via recruiters is growing, even while the overall employment rate is plateauing. This suggests that more employers are turning to recruiters to help them fill vacancies as candidate availability continues to fall and recruiting good people becomes that much harder. As a response to these candidate shortages are offering increased starting salaries to attract staff but while this has been the case for some time it isn’t translating into significant wage growth across the economy yet.

Early in the New Year, people often think about changing jobs, so employers are going to have to think carefully about how they can both retain existing capabilities and find the new hires they need as competition for people intensifies. Bosses should consider going to wider talent pools and to be inventive about how to improve their employer brand and make themselves an even more attractive place to work.

 

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Job Searches: Look at the Entire Package (Not Just the Salary!)

Job Searches: Look at the Entire Package (Not Just the Salary!)

The start of a new year often coincides with a spike in job searches. In fact, more than half of the UK population will look for a new job in 2018. It can be tempting to focus solely on the offered salary. However, a wider perspective which takes into account the entire package being offered is advisable. Other factors to be considered include:

Pension Contributions

It can be important to consider whether your employer is using a defined contribution (DC) pension or a defined benefit (DB) pension scheme. The average employer for a DC scheme puts in 3.2% of salary, but this number can range from the minimum 1% to 10%. The average employer for a DB scheme, conversely, puts on 16.9%. If you seek a greater reward for your work, rather than additional cash, this can be a way of getting more money from your employer by diverting a greater amount of your salary into your pension.

Life Cover

Almost all employers offer a payment of several times your salary if you die while performing contractual duties. The majority will also pay for income protection; this will provide you with a regular income if you are unable to work for a while.

Medical Insurance

One-fifth of employees have private medical insurance. To replace this benefit, it would cost an average of just under £1,500. The benefits outweigh the payment of tax on their cover.

Save as You Earn Schemes

After paying a monthly sum into such schemes for a period of three to five years, you will be given a bonus. You can then buy shares in your employer at a fixed price. If the share price has increased during the period you can buy the shares at a large discount. If share price has fallen, you simply get your savings back with the addition of the bonus.

If you are currently involved in such schemes and decide to move employers, you will only get your savings back and no longer have the option to buy shares. Occasionally a new employer will compensate you for the forgone share options.

Other Benefits on Offer

These include:

  • Tax-free childcare vouchers;
  • Tax-efficient computer or bike schemes;
  • Season ticket loans;
  • Cheaper insurance cover;
  • Discounted shopping vouchers;
  • Free parking.

In conclusion, it is important to compare ALL the benefits offered by an existing and potential employer before deciding to accept a new job. There may be the possibility to negotiate with your current employer over the benefits offered.

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Permanent placements rise to greatest extent since August

Key Points from the November Survey:

  • Permanent placements rise at a quicker pace;
  • Availability of candidates continues to decline sharply;
  • High demand for staff leads to further increases in pay;
  • The unemployment rate remains low.

Staff Appointments Rise Further…

The growth in permanent placements has reached a three-month high across the UK. The rise has been attributed to an increased demand for staff and company expansion plans.

The number of permanent placements in the South, conversely, is increasing at a slower rate.

Vacancies…

Staff vacancies have continued to rise sharply. The rate of growth since October, however, has slackened slightly.

Across all sectors, the number of permanent staff vacancies has increased. In descending order, the sectors with the greatest number are:

  • Accounting/Finance;
  • IT and Computing;
  • Engineering;
  • Executive/Professional.

Staff Availability…

Across the UK the availability of candidates to fill permanent roles has continued to decline. The South has recorded the steepest decline in permanent labour supply. The key permanents staff skills reported to be in short supply include:

  • Accounting/Finance:
    • Audit, Estimators, Insurance, Paraplanners, Payroll.
  • Blue Collar:
    • HGV and LGV Drivers, Production and Distribution.
  • Construction:
    • Construction, conveyancing, Quantity Surveyors.
  • Engineering:
    • Aerospace, Engineers, Technicians.

Pay Pressures…

The average starting salaries for permanents jobs has continued to increase, resulting in a growth which has lasted for just over five-and-a-half years. The increase is salary has been attributed to low candidate availability combined with a strong demand for staff. The quickest rate of inflation has been recorded in the North.

Unemployment…

The unemployment rate and claimant count for the UK remains historically low.

The unemployment rate stands at the lowest level it has been since 1975. It is virtually identical for both men and women.

In October, approximately 806,000 people claimed out-of-work benefits. Although a rise by around 24,000 people compared to last year, the claimant count has remained close to its lowest level recorded in the early 1970s.

 

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Concern about Compliance with MiFID II

Concern that over one third of financial services are unsure if they are MiFID II compliant

What is MiFID II?

MiFID II is an EU Directive which comes into force January 3rd 2018. Its purpose is to offer greater protection for investors and create greater transparency in all asset classes: from equities to fixed income, exchange traded funds and foreign exchange.

How will it affect investment decisions?

The legislation will change how Asset Managers pay for the research they use to make investment decisions. Prior to the Directive, Asset Managers received research for free, although the cost of this service was paid into trading fees. This is generally is paid by Fund Managers’ clients. In a process called unbundling, under MiFID II Fund Managers will have to budget separately for research and trading costs.

Concern over compliance with the Directive

A recent survey, conducted by managed cloud service provider Timico, found 39% of UK financial firms are not sure whether their organisation is compliant with the new regulations, while just 8% of companies said their employees were fully aware of MiFID II’s legal implications and had received relevant training.

MiFID II also places strict controls on all communications; regulated firms will be obliged to document all communications that are intended to result in a transaction.

However, Timico found 42% of respondents said their firms do not currently have a mobile compliant platform in place to record calls, 25% said they are not yet compliant with recording requirements and 29% are still going through the compliance process.

Penalty for failing to adhere to MiFID II

Companies can be fined up to 5m Euros, or 10% of annual turnover, for non-compliance.

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Brexit: A Ticking Time-Bomb for London’s Financial Industry?

Brexit: A Ticking Time-Bomb for London’s Financial Industry?

Fears are escalating as there are concerns that Britain’s vote to leave the EU in 2019 will harm one of its most successful industries…

The Impact of Brexit on the Financial Sector

The industry is crucial to Britain’s economy, accounting for 12% of Britain’s economic output and paying more tax than any other industry. Roughly one-third of the transactions within this sector involve clients in the EU.

There is a division among the population as to the impact Brexit will have on the industry. Politicians and economists warn that London may lose its renowned position as a financial centre. Conversely, those who voted leave support their decision, arguing that Britain will benefit through becoming more self-sufficient.

Indicators

The exact impact of Brexit cannot be predicted. However, below are some indicators to show that leaving the EU will encourage a slowdown in the economy but no drastic decline.

  1. Commercial Property

Highly-respected estate agents record that commercial property prices in London have dropped more since the Brexit vote than during the global financial crisis of 2009.

In terms of figures, the price renting of real estate has dropped by about 5% since last year. However, leasing activity in this area was 17% higher than the long term average in the first three-quarters of 2017.

  1. The Tube

Apart from a few exceptions, in general fewer people are using the tubes. The number of people using Bank and Monument stations is facing its first fall since 2009. A spokesman for Transport for London denies that the closure of some escalators at Bank station in response to the expansion was a significant cause of this change.

In terms of figures, the number of people using the above station declined by 2.7% from 2016-2017.

Although the number of people who using Canary Wharf station has continued to rise, the pace has slackened.

  1. Bars and Restaurants

Currently there appears to be no impact from Brexit of premises applying or renewing their licences to sell alcohol. In fact, the first eight months of 2017 showed these figures to be at a record high.

However, London’s night life no longer focuses on finance workers but attracts a diverse array of individuals. These findings may not be entirely pertinent for this study.

  1. London City Airport

This airport is selected especially by executives for flights to European cities and beyond. Statistics suggest that the number of such people using this airport faces its slowest increase in five years.

In terms of figures, the increase in passengers in the first six months of 2017 was only 0.9% compared to the average annual increase of 10% in the previous four years.

  1. Job Availability

The number of available jobs in London’s Financial Services has fallen the most in the five years.

A survey concluded that 51,922 new financial jobs were created in the first seven months of 2017. This is a 10% decrease in comparison to 2016.

It is estimated that around 10,000 finance jobs will be transferred out of Britain and placed overseas in the near future if Britain is denied access to Europe’s single market. The first type of jobs to be transferred may be at the lower end of firms, meaning that in the short term London may still cling onto its status as a financial centre.

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