Steeper increases in permanent placements
Starting salary inflation close to September’s recent high
Steeper decline in candidate supply
“firms continue to hire new staff at near record rates. With the jobs market so heated, businesses across the country, of all types, are struggling to find work ready staff. Some clients tell us they are seeing the worst period of staff availability for many a year. A four-decade low in unemployment means good candidates are at a premium. Consequently, we’re seeing wages pushed upwards and now may be a good time to move to secure a pay rise!
- Staff appointments increase at quicker pace…
- The number of people placed into permanent jobs rose at a sharp and accelerated rate in October.
…as demand for staff remains robust
- Growth of demand for staff remained historically sharp at the start of the fourth quarter.
- Starting salary inflation continues to rise…
…driven by sustained fall in candidate availability..
- Overall candidate availability declined at the quickest pace for nine months in October.
- Starting salaries rise sharply amid steep reduction in candidate supply
- Permanent placements expand at slightly weaker pace
- Vacancy growth softens to near two-year low, but remains strong
Companies generally are struggling to find the people they need to drive growth and opportunity.
Permanent placements growth softens…
Permanent staff recruitment continued to rise at the end of the third quarter, albeit at a softer pace. Nonetheless, growth remained sharp…
…as candidate availability drops further
We have found there is continued difficulties regarding the availability of staff for the vacancies we have. Although easing since August, the rate of deterioration in permanent staff availability remained sharp.
Starting salary inflation reaches 41-month peak…
Starting salaries for people placed into permanent jobs increased at the quickest pace since April 2015 during September.
…as demand for staff remains strong
Key market points:
- Permanent placement growth softens to nine-month low…
- Staff vacancies expand at quickest rate since last November
- Decline in candidate availability eases, but remains historically sharp
The rise in interest rates for only the second time in a decade may leave some people feeling the pinch. But a new job is one way people can ease the burden on their finances. With our data showing starting salaries continuing to rise, the latest official government figures suggest that we are finally seeing the effects of a tighter labour market feed through to pay.
Softer rise in permanent staff appointments…
Permanent placements continued to rise sharply in July, though the rate of expansion was the softest recorded since last October.
…as supply of candidates continues to drop markedly
A candidate shortages weighed on permanent recruitment. The supply of permanent candidates fell sharply in July, despite rates of decline easing to the weakest in three months.
Staff vacancies rise at quicker pace…
Demand for staff strengthened further in July, with overall job vacancies expanding at the quickest rate for eight months.
…maintaining upward pressure on pay
Low candidate availability and robust demand for staff led to a further steep increase in salaries awarded to permanent starters.
Candidate shortages contribute to slower rise in recruitment in June…
Key points from June:
- Permanent placements continue to rise, but not as sharply as previous months
- Candidate availability deteriorates at steeper pace
- Robust demand for staff leads to further marked rises in pay
Commentary : It’s a great time for people looking to take the next step in their careers, as employers compete for new staff in a tight market. It’s a candidate’s market out there.
Across the majority of sectors, both temporary and permanent opportunities are growing, and a lack of candidates means it is no surprise to see starting pay also rising.
This high vacancy rate may be driven by good demand from companies not being matched by candidate willingness to move in the face of the current economic uncertainty.
Softer increase in recruitment…
Placements both continued to rise sharply in June, despite rates of expansion easing.
…as candidate availability falls at sharper rate
Lower candidate availability was cited as a factor hampering growth. Notably, permanent availability declined at sharper rates at the end of the second quarter.
Steeper increase in staff vacancies
Vacancies continued to rise sharply in June. Growth of demand for permanent staff edged up to a seven-month high, while short-term vacancies rose at a slower yet still strong rate.
Pay pressures remain historically marked
Salaries for permanent roles increased further in June, with the rate of inflation holding close to a three-year high…
Key points market indicators :
- Steep increases in permanent placements
- Severe staff shortages leads to quickest rise in starting salaries for three years
- Staff vacancies expand at the quickest pace since last November
Despite growth in demand for staff this month, there has been another drop in staff availability. There has been a rise in client recruitment indicating that employers are feeling confident in making hiring decisions but a lack of candidates remains a major challenge
Because of the lack of candidate availability we are seeing employers paying higher salaries to attract the right people. This is only part of the solution, with employers also having to think about providing a more flexible working environment and progression opportunities. With skills needs and candidate expectations continuing to evolve, employers are having to radically re-imagine their hiring procedures.
Appointments continue to rise strongly…
Permanent appointments continued to rise at a robust pace, despite growth softening to a five-month low.
…as demand for staff strengthens
Growth of demand for staff strengthened to a six-month high in May, with sharp increases in permanent roles .
Sharp fall in candidate availability…
Overall, candidate availability declined at a sharper rate midway through the second quarter. Candidate numbers fell at the fastest rate for four months, while short-term staff availability deteriorated at the quickest pace since last November.
…leads to steepest increase in starting salaries for three years
Strong demand for staff and low candidate availability underpinned further increases in starting salaries and temp pay. Notably, salaries awarded to successfully placed permanent workers rose at the steepest rate for three years
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.