Key points from October survey:
– Labour supply falls at sharper rate…
– …exerting upward pressure on starting salaries and contract pay
– Growth of permanent vacancies fastest regionally
Commenting on the latest survey results, Bina Mehta, Partner at KPMG UK said:
“Whilst it’s great to see the number of people in London getting into permanent work has risen, there is a worrying cloud on the horizon in the deterioration of the supply of jobseekers. This could be down to a general decline in the population growth of London, however as no-deal moves ever closer, there could also be a number of jobseekers waiting to see how Brexit plays out for London before deciding on their next move.
“As London is a business services hub, it is people who drive productivity, and with employers unable to fill their vacancies – it could have a negative impact on our productivity levels. The shortage of good candidates for roles is driving up salaries, and whilst that’s good for the economy, it’s not a sustainable situation for most employers, particularly at an SME level where profitability drives growth. Employers in London will need to think innovatively about how they can approach an impending skills shortage.”
Solid rise in permanent staff placements
The latest report on jobs indicated that more people were placed into permanent jobs in the capital, but growth softened from September’s 16-month high. Recruitment consultancies that signalled greater numbers of permanent appointments cited strengthening demand for staff, while fewer job applications reportedly limited the extent of the overall increase.
Contract billings growth at five-month high
Contract billings in London rose in October, stretching the current sequence of expansion to 27 months. According to panellists, the upturn reflected increased client demand for short-term workers. Moreover, the pace of growth was sharp and the quickest since May.
Permanent job vacancies in London increased sharply in October, with recruiters indicating growth of roles in catering, compliance, IT, marketing, risk and sales. Despite easing to a four-month low, the pace of expansion
was steep. Contract vacancies also rose at a sharp, albeit slower, rate. There were reports of greater demand for personal assistants, project managers, receptionists and banking & finance personnel.
Sharp deterioration in jobseeker numbers for permanent positions
October data pointed to a further decrease in the number of candidates willing to undertake full-time employment in London. Around one third of recruitment consultancies reported a reduction in staff availability, while 11% signalled an improvement. The overall pace of contraction was sharp and quicker than that seen at the end of the third quarter.
Sharper reduction in contract supply
Not only did contract availability fall for the sixty-third month in a row, but also to the greatest extent in the year-to-date. Recruitment consultancies noted a wide range of skills in short supply, including administrators, baristas, chefs, developers, personal assistants, project managers, and receptionists.
Sharp rise in starting salaries for permanent staff
Newly-placed permanent workers in London experienced an increase in salaries during October. The rate of inflation was the second fastest in almost three-and-a-half years, behind that seen in September. Anecdotal evidence
highlighted efforts to encourage applications for jobs amid skill shortages in the local labour market as the key reason for greater pay.
Contract wage rates increase for twenty-fifth successive month
London also saw an upturn in contract wage rates during October, taking the current sequence of inflation to just over two years. Recruiters reported competition for scarce skills as the main factor bumping up pay. Although weaker than in September, the rate of increase was above its long-run average and marked overall.
Official data – UK Average Weekly Earnings
Data from the Office for National Statistics signalled that average weekly earnings across the UK increased 2.2% on an annual basis in the second quarter of 2018. The North East posted the strongest annual rise, up 9.1% to £549. Meanwhile, the quickest fall was seen in the South West, with average weekly earnings falling 4.6% compared to a year ago to £574.
Permanent staff appointments in the UK rose at a quicker rate in October, supported by stronger increases in three English regions. London was the only area where a slowdown was registered, while the South of England led the upturn. October data pointed to a widespread rise in contract billings, with rates of growth gathering pace in each of the four English regions. The strongest increase was once again noted in the Midlands and the weakest in the South of England. At the UK level, the latest expansion was the most pronounced since May.
Permanent staff supply across the UK deteriorated to the greatest extent since the start of the year. Three of the four English regions recorded sharper reductions in the availability of permanent labour, the sole exception being the Midlands where a softer contraction was noted. Contract supply decreased at the quickest pace in the Midlands. Sharper deteriorations were also noted in the capital and the North of England, with the South of England bucking the wider trend and seeing a slightly slower rate of reduction. In the UK labour market, the fall in contract availability numbers was the most marked since November 2017.
About Langley James
Langley James was founded in 1999 by James Toovey, a highly respected recruitment industry professional. James wanted to provide something unique: a bespoke recruitment service which was founded on service excellence. With offices in London and Chester, we are now providing our recruitment services throughout the world and over the last 18 years have worked with some of the most respected companies.
The average time form taking a role…
– and Delivering a Qualified Shortlist of Candidates 3 days
– and First Confirmed Interview 5 days
– and Confirmed Placement 8 days
To find out why so many companies turn to Langley James for support in fulfilling their IT recruitment needs, call and speak to one of our specialist consultants today on 0207 788 6600.
In conjunction with: IHS Markit and sponsored by the Recruitment and Employment Confederation.