Key points from the September survey:
– 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
Neil Carberry, Chief Executive at the REC says:
“UK businesses are resilient, but they’re struggling to find the people they need to drive growth and opportunity. Recruiters’ specialist skills help to address this, but with Brexit looming a comprehensive mobility deal with the EU will be needed to underpin prosperity. Higher skills investment, driven by a reformed apprenticeship levy, will also be essential.
An effective approach to post-Brexit immigration must acknowledge that there is unmet need for roles of all sorts – not just those filled by the very highest earners. Keeping deliveries going, patients being treated and goods on the shelves means an open approach to workers from elsewhere. Businesses understand the need for control – but this is not in conflict with openness to those who come to contribute.”
Permanent placements growth softens…
Permanent staff appointments continued to rise at the end of the third quarter, albeit at a softer pace. Nonetheless, growth remained sharp in the context of historical data. In contrast, contract billings expanded at a slightly quicker pace compared to August.
…as candidate availability drops further
Recruitment consultants reported continued difficulties regarding the availability of staff for both permanent and contract roles. Although easing since August, the rate of deterioration in permanent staff availability remained historically sharp. Contract labour supply also fell sharply, with the latest drop the fastest for ten months.
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. Hourly rates of pay for contract staff also rose at a faster pace than in the preceding month.
…as demand for staff remains strong
September data pointed to a further rise in job vacancies for both permanent and contract roles. The rate of growth in staff demand was sharp overall, albeit the weakest seen for nearly two years.
Permanent placements growth cools slightly
September survey data signalled a further increase in the number of people placed into permanent jobs, thereby extending the current sequence of expansion to 26 months. Despite easing from August’s five-month peak, growth remained sharp and continued to outpace the historical average. Increased demand for staff and rising activity levels at clients were linked by recruiters to the latest upturn in permanent staff appointments. However, there were also reports that candidate shortages had limited overall growth.
London registered the quickest increase in permanent placements of all four monitored English regions, while the weakest expansion was seen in the Midlands.
Contract billings expand at quicker pace
Billings received from the employment of contract staff rose again in September. Notably, the rate of expansion quickened since August and was slightly above the long-run average. All four monitored English regions noted increases in contract billings. The strongest rise was seen in the Midlands, while the weakest expansion was registered in the South of England.
Vacancy growth softens
At 60.3 in September, the Report on Jobs Vacancy Index remained well above the neutral 50.0 level to signal a further steep increase in staff demand. That said, the reading was down from 61.6 in August and the lowest recorded since October 2016. Underlying data pointed to slower increases in both permanent and contract staff vacancies at the end of the third quarter.
Public & private sector vacancies
Private sector roles continued to register a stronger rise than public sector vacancies in the latest survey period. Private sector contract staff saw the fastest growth of demand overall, while the slowest was seen for permanent
public sector workers.
Other vacancy indicators
Data from the Office for National Statistics (ONS) showed that job vacancies were up 5.6% year-on-year in the three months to August. Although this was down slightly from a 6.7% increase in the preceding three months, it nonetheless set a fresh record in the total number of vacancies (833,000). Latest available data signalled that internet-based recruitment spending declined by 5.5% on an annual basis during the opening quarter of 2018. This was softer than the 7.9% drop seen in the final quarter of last year.
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.
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: Markit and sponsored by the Recruitment and Employment Confederation.