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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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.


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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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.


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.


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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Report on Jobs: South (ex London) – March 2016

Key points from February survey:

  • Slower demand growth and less marked drop in supply of permanent candidates…
  • …results in weakest rise in salaries for new starters since October 2014
  • Growth in temp billings remains relatively subdued

Staff Appointment:  Growth of permanent placements remains below 2015 trend

Recruitment agencies in the South of England reported a further rise in full-time appointments in February. The rate of growth remained above the long-run survey average, and was strong overall. That said, it remained slower than the trend pace set in 2015.

Staff Availability:  Drop in supply of permanent candidates slows

The availability of labour for permanent roles in the South fell for the thirty-second consecutive month in February. The pace of decline remained strong overall, and was faster than the UK average. That said, it was the slowest since January 2015 and the second-weakest in over two years.

Pay Pressures:  Permanent salaries

Recruitment agencies in the South reported a further marked rise in salaries awarded to new permanent staff in February.  The rate of inflation remained stronger than the long-run survey average, but slowed for the third successive month to the weakest since October 2014.

Regional Comparisons: 

Staff appointments

February saw a further broad-based increase in permanent staff appointments in the UK, as all four monitored regions posted growth. Moreover, rates of expansion accelerated in all cases. The strongest upturn was, once again, seen in the Midlands and the weakest in London.

Candidate availability

Permanent candidate numbers fell across the four monitored English regions in February, the thirty-second successive month in which this has been the case. The quickest rate of deterioration was noted in the Midlands and the slowest, although still sharp, in London.

Pay Pressures

Permanent salaries in the UK rose for the forty-sixth straight month in February, with increases seen in all four surveyed regions. The strongest rate of salary inflation was recorded in the North, and the slowest in London.


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.

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Report on Jobs – March 2016

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.


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August’s Job Market Report

Growth of staff appointments falls further…blue news

Although permanent placements continued to rise in August, the rate of growth eased further, hitting a 27-month low.

…restricted by skill shortages

The availability of candidates for permanent roles fell further in August, with the rate of decline accelerating to the sharpest for a year.

Salary growth remains strong…

Starting salaries for people placed in permanent roles continued to increase in August. The rate of growth remained strong relative to the survey’s historical average.

…supported by robust demand

Vacancies continued to rise at a marked rate in August. Demand for permanent staff continued to rise at a faster pace than that for temps.


Permanent placements increase at slowest pace since May 2013 whilst vacancies growth remains strong

The number of people placed in permanent roles rose further in August. However, the rate of expansion moderated further from April’s recent high to the slowest in 27 months. Anecdotal evidence suggested that, although demand for staff remained strong, placements had in many cases been held back by a lack of skilled candidates.

Midlands-based consultancies signalled the strongest growth of permanent placements during the latest survey period, while those in London recorded the weakest increase.

Demand for staff continued to rise at a marked rate in this time.

Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 10.4% on an annual basis in the three months to July. That was the slowest growth since the three months to March 2013


The availability of permanent staff continued to deteriorate in August whilst salary growth continued to rise

Moreover, the latest fall was the sharpest for a year, with close to half of panellists reporting a decline in the latest survey period.

Lower permanent staff availability was signalled across all four of the monitored English regions, with the Midlands seeing the steepest reduction.

Key permanent staff skills reported in short supply:

  • Accountancy/Financial: Audit, Compliance, Credit, Finance, Paraplanners, Risk.
  • Executive/Professional: Management.

A number of panellists linked a shortage of skilled workers to helping push a further rise in starting salaries for successfully placed candidates. The Midlands recorded the sharpest increase in salaries during the latest survey period, while London saw the slowest rise.


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

“There was no respite for recruiters in August, who were left struggling to fill vacancies after a vast swathe of Britain’s job seekers appeared to take the summer off. The number of people looking for a job fell at the sharpest rate seen for a year, leaving unfilled posts across the economy.

“Many candidates may have simply shelved their plans for the summer, believing their prospects to be stronger in September. However this is of little comfort to those businesses needing staff now to meet demand for their goods and services.

“This frustrating dynamic continues to have an inflationary effect on pay, which rose yet again in August. With candidates having their pick of the job market, companies need to offer more than just cash. In order to attract and retain the best people businesses need to offer a bespoke package of benefits, including flexible working, which can be tailored to suit the individual and their priorities and commitments.”

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April Employment Survey News

Key points from the April survey:office seating

  • Strongest increase in permanent staff appointments in eight months
  • Acceleration of pay growth for permanent and temporary staff
  • Candidate availability deteriorated further


The main findings for April are:

Permanent placements growth accelerates…

The number of people placed in permanent jobs by recruitment consultants continued to rise in April. In fact, the rate of expansion quickened to an eight-month high. This reflected a stronger increase in demand for staff, with permanent vacancies rising at the fastest pace since October 2014. This made it the strongest growth of demand for permanent staff in 6 months.

Pay growth strengthens…

Growth of permanent staff salaries accelerated to a nine-month high in April, with panellists highlighting a combination of strong demand and skill shortages. Hourly rates of pay for temporary/contract staff meanwhile increased at the fastest pace since July 2007.

…amid tight candidate availability

The availability of staff to fill permanent roles deteriorated further in April, with the rate of contraction accelerating to the sharpest in five months. As much as around 41% of panellists reported lower permanent candidate availability versus 9% noting an improvement. Temporary/contract staff availability meanwhile declined at a marked pace that was similar to that seen in March.

Public & private sector vacancies…

Private sector demand for staff continued to rise at a stronger pace than that for public sector workers in April. The fastest rate of growth overall was signalled for private sector permanent employees.

Other vacancy indicators…

Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 19.8% on an annual basis in the three months to March. That was the slowest growth since January 2014.

Meanwhile, internet-based recruitment spending was up 4.5% on a year-on-year basis in the fourth quarter of 2014. This was the weakest rise since the first quarter of 2013.

Top Permanent Staff Sectors for Recruitment…

Good news for candidates in the financial services job market as Executive/Professional was the most in-demand category for permanent staff in April, with Accounting/Financial in second place.

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March Employment News

reflected apple pc

 Key points in March:

  • Further marked increases in permanent placements
  • Salaries for permanent hires rise at sharpest rate in six months
  • Candidate availability tightens further.

The main indicators for March are:

Recruitment continues to rise strongly…

March survey data highlighted further marked growth of recruitment activity across the UK. Permanent staff placements rose at a rate unchanged from February’s considerable pace.

…supported by robust demand for staff

Job vacancies rose to a five-month high in March, signalling strong demand for staff. Marked rates of expansion were indicated for both permanent and short-term workers.

Salary growth fastest in six months…

Average starting salaries for people placed in permanent job roles increased further in March. The latest increase was the strongest since last September. Hourly rates of pay for temporary/contract staff rose at a robust pace, albeit slightly slower than in February.

…amid falling candidate availability

The availability of staff to fill vacancies continued to decline in March. The latest drop in permanent candidate supply was the sharpest in four months, while temp availability deteriorated at the fastest pace since last October.


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Market News Feb 2015

UK wide there has been stronger growth of staff appointments…

left laptopPermanent staff placements rose further in February. The rate of growth in appointments was marked and the fastest since last October….

…buoyed by improved demand for staff

Vacancies available for people seeking employment continued to rise in February. Overall demand for staff rose at the strongest rate in four months, with both permanent and temporary workers seeing faster increases.

Further marked rise in salaries

Permanent staff starting salaries continued to increase in February. The rate of growth was unchanged from the marked pace seen in January.

Candidate availability continues to fall

The availability of staff to fill job vacancies decreased further in February. Both permanent and temporary candidate supply deteriorated to a greater extent than in the previous.

Whilst in London and the SE…..

Permanent staff placements growth strengthens

Permanent placements increased further in February, continuing the trend shown since August 2012. Moreover, the

rate of growth accelerated since January, and was stronger than the average over the current sequence of expansion.

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