Report on Jobs - Permanent placements rise further in May, albeit at slowest pace in four months

Report on Jobs - Permanent placements rise further

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs provides the most comprehensive guide to the UK labour market,

Also on KPMG.com

Key points:

  • Growth of permanent placements eases, but remains marked overall
  • Temp billings rise at faster pace
  • Permanent salary growth remains strong

Summary:

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Permanent placements growth eases…

Permanent staff placements continued to rise in May. However, the rate of expansion moderated to a four-month low. This mirrored an easing in growth of available vacancies for permanent staff, with the latest increase the slowest in 2015 so far.

...but temp billings rise at faster pace

Agencies’ billings from the employment of temporary/contract staff increased further in May. The rate of growth in short-term appointments was strong, having quickened since April.

Salary growth cools, but still strong…

Starting salaries for people placed into permanent jobs increased further in May. Although easing from April’s nine-month high, the rate of growth remained strong overall. Temporary/contract staff hourly pay rates rose further, albeit at the slowest pace since January.

…as candidate availability remains tight

Recruitment consultants reported continued difficulties regarding the availability of suitable staff for permanent roles in May. Although easing slightly since April, the rate of deterioration in permanent staff availability remained marked. Temp availability also fell sharply, with the latest drop the fastest in seven months.

Regional and sector variation

Permanent placements growth was broad-based across the English regions in May. The South registered the fastest rate of expansion, closely followed by the Midlands.

The Midlands and London posted the sharpest growth of temporary/contract staff appointments during the latest survey period, while the slowest increase was signalled in the South.

Private sector roles continued to register a higher rise than public sector vacancies in the latest survey period. Private sector permanent staff saw the fastest increase overall.

Demand rose for all monitored categories of permanent staff in May. Executive/Professional employees registered the sharpest expansion of demand, while the slowest growth was indicated for Construction workers.

Nursing/Medical/Care was the most in-demand category for temporary/contract employees during May. At the other end of the table, the weakest growth of demand was signalled for Construction staff.

Comments:

Bernard Brown, Partner at KPMG, comments: “The UK job market saw a slight slowdown in May, as those on boards took time to digest the election result and work out the ramifications for their business.  This pause did not dampen temporary staff placements, and temp billings rose for a twenty-fifth consecutive month.

“Growth in the services sector continued to outpace that of Britain’s heavy industries, with the former seeing a significantly stronger appetite for new hires to keep up with the volume of new orders coming in.  These statistics will add more weight to the fears that the economy is not rebalancing as hoped, and are a worrying reminder of the recovery’s reliance on the performance of the white collar service sector.

“While elements of the private sector are thriving, the public sector continues to suffer, with pay growth rising by just 0.2% in the last reported quarter. This stagnation is in stark contrast with the pay awards seen in Britain’s businesses, whose staff saw average rises of 2.4%, driven by the booming service sector. With the Government’s continued focus on austerity, this imbalance is unlikely to be readdressed in the near future.”

Kevin Green, REC chief executive, says: “It’s imperative that the new government gets to grips with skills shortages because a jobs crisis is looming. Recruiters are doing a great job at getting more and more people into work, but four in ten of those recruiters say that the availability of candidates is getting worse each month.

“Businesses are looking to expand, and roles like marketing, legal and HR are increasingly in-demand. This is good news for jobseekers because they can command higher starting salaries as employers compete for talent. But at the same time, shortages are a serious threat to long-term sustainability for organisations within both the private and the public sector.”

On the Department for Health’s announcement that new measures will be introduced to restrict NHS spending on agency nurses and doctors, he adds: “Framework agreements set by central government already exist to manage the relationship between the NHS and recruiters, and limit prices. The proposals for further regulation miss the point, which is that doctors and nurses are not available to fill all the current permanent vacancies in the NHS. The government’s proposals for changes to the contractual relationship with agencies risk creating more problems than they are trying to fix.

“Recruiters have told us consistently over the last year that candidates to take up permanent nursing and care roles especially are in short supply, and demand is increasing rapidly. The government needs to train new nurses, make permanent roles in the NHS more attractive, and engage with agencies about how to safely staff hospitals in order to meet increasing demand from patients.”

Full reports and historical data from the Report on Jobs are available by subscription. Please contact economics@markit.com

- ENDS -

 

Note to Editors:

The Report on Jobs is a monthly publication produced by Markit on behalf of the Recruitment & Employment Confederation and KPMG. The report features original survey data which provides cross-sector and pan-region analysis of the UK labour market, drawing on original survey data provided by recruitment consultancies.

The Report features original research data from Markit, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2013/14, 1,155,932 people were employed in either temporary or contract work through consultancies and 634,608 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.

All Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.

Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact economics@markit.com.

A regional Report on Jobs series is now available comprising four regional reports tracking labour market trends across the Midlands, the North of England, the South of England and London. The reports are designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

About the Recruitment & Employment Confederation

Dorset House, First Floor, 27-45 Stamford Street, London, SE1 9NT. Tel: 020 7009 2100 Website: www.rec.uk.com

The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry.

About Markit

Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ over 3,500 people in 10 countries. Markit shares are listed on Nasdaq under the symbol MRKT. For more information, please see www.markit.com.

© Copyright in the Report on Jobs, including the Report on Jobs survey data, is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.  In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Markit is a registered trade mark of Markit Group Limited.

 

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