- Continued rise in permanent placements;
- Growth of demand for staff picks up for the first time in nine months;
- Steeper decline in candidate availability triggers greater rises in pay.
There has been an increase in permanent placements but the rate of expansion in April was the softest witnessed in 2018. The growth of placements was underpinned by a further substantial rise in demand for staff and greater job vacancies.
Decline in candidate availability…
The rate of reduction in candidate availability for permanent roles has quickened to a three-month record. The steepest decline was in the South of England.
Growth of demand for staff…
Vacancies for permanent roles have increased, thereby indicating that there is a greater demand for staff. This demand was higher in the public, as compared to the private, sector.
There has been a further rise in starting salaries for candidates placed into permanent roles. This has been linked to candidate shortages and a robust demand for staff. The strongest rise was in the South of England.
Demand for staff is still on the rise in every other sector, but candidate availability keeps dropping. Employers are paying more to attract the right people into their vacancies. For individuals, now is a good time to look for a new job, as you are in a strong position to negotiate higher pay. For employers, the challenge is to stay ahead of the competition to maintain and enhance your workforce. This is about more than just pay, it is about providing progression opportunities and a positive workplace culture. As recruitment gets harder the only solution for employers is to get better at attracting and retaining the right skills and staff…
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.
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.
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.
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.
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.
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.
- 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.
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 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.
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.
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.
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.
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:
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.
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.
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
- 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.
A highly insightful article about the rise of the “gig” economy globally and its implications:
Key points from the October survey:
- Continued growth of appointments but at a softer pace
- Availability falls sharply
- Starting salaries increase at second-quickest rate since November 2015!
Commentary “Its great news that employers are continuing to hire. However, that growth is slowing down and one of the reasons is that we simply do not have enough people for all the roles that are out there at the moment. And the number of vacancies is still getting higher. For jobseekers this is good news as employers are willing to pay higher starting wages to attract the right candidates.
EU workers are leaving because of the uncertainties they are facing right now so the situation may well get worse and employers will face even more staff shortages.”
A strong underlying demand for permanent workers has created the continued growth in recruitment. However, shortage of suitable candidates and concerns over
the UK economic outlook has been detrimental to the overall pace of expansion.
This trend occurred throughout all of England; however permanent job vacancies in the South of England continued to increase at a faster rate than the national average.
Increased Demand in Workers Juxtaposed with Declined Availability of Workers…
Since October 2016 to October 2017 there has been an increased demand in workers across all sectors, in particular:
- Accounting/Financial – increase of 9.1%
- IT & Computing – increase of 4.1%
- Engineering – increase of 3.3%
The problem is compounded by the lack of availability of workers throughout the UK. The sharpest drop in permanent candidate availability continued to be seen in the South of England.
Starting salaries for people placed in permanent jobs has increased further.
The rate of pay inflation has also quickened throughout the UK and was the second-strongest recorded since November 2015. The steepest increase in rate of pay inflation was in the South of England.
Earnings and Inflation…
Average weekly earnings have continued to increase but at a slower pace than living costs. Higher fuel and food costs have been key culprits in the inflation. Combined with the concerns that real pay will continue to decline, there will be further pressure exerted on household budgets and spending.