Salaries Up and Candidate Availability Down - UK Employment Report for July 2021
Record rise in starting salaries as candidate availability falls sharply
Key points from the survey:
- Supply of workers plummets, driving stronger increase in starting pay
- Permanent placements and temp billings both rise rapidly
- Vacancies expand at record pace
The main findings for July are:
Further marked upturn in recruitment activity
Robust demand for staff and the further rollback of pandemic restrictions led to a sharp increase in the number of people placed into permanent job roles in July, with growth easing only slightly from June's all-time record. Temp billings meanwhile expanded at the quickest rate since June 1998.
Starting salaries increase at quickest pace on record...
Rising demand for staff and a further marked drop in candidate supply led permanent starting salaries to increase at a quicker pace. Notably, the rate of salary inflation was the sharpest seen in nearly 24 years of data collection. Moreover, temporary/contract staff hourly pay rates rose at the second-quickest rate since the survey began.
...amid unprecedented rise in demand for staff...
Latest vacancy data indicated faster increases in demand for both permanent and temporary workers in July. Growth of demand for permanent staff hit a fresh series record, while the upturn in temporary vacancies was the steepest since November 1997.
...and sharp drop in candidate supply
Ongoing uncertainty stemming from the pandemic and concerns over job security contributed to another severe drop in candidate availability in July. Brexit was also cited as a key factor reducing the supply of workers, particularly temporary staff. Overall, candidate numbers fell at the second-sharpest rate in the survey history, easing only slightly from June's record.
Commenting on the survey, Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG said:
“With salaries for new hires increasing at their quickest rate in 24 years and a sharp rise in permanent placements in July, job seekers should be taking advantage of the buoyant market to land their dream role. “But while companies want to invest in their business now restrictions are lifting, demand for new staff still outstrips supply due to low candidate availability. We know that reskilling and upskilling is needed to help people move between sectors, and there’s no doubt the ‘pingdemic’ has added an extra dimension to the recruitment challenge. Plus, with furlough due to end soon, there may be a downward pressure on pay to come. “That’s why after a tough 18 months, businesses are now hoping for some much-needed stability in the labour market so they can focus on recovery and growth.”
Kate Shoesmith, Deputy Chief Executive of the Recruitment & Employment Confederation, said:
““The COVID-19 pandemic continues to wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen. “The uncertainty over the outlook is weighing heavily on the nation – we estimate that as many as 13 million jobs are highly affected by the lockdown, representing just over a third of all jobs in the UK. “It’s an unprecedented situation for UK business and resilience, then recovery, is key to navigating through the crisis. All eyes will also be on the Government’s forthcoming announcement on easing current restrictions so confidence in the jobs market can start to rebuild.”
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends.
Mosaic Search and Selection Ltd contribute market data to this Report on Jobs which is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation and KPMG LLP. The full copy of this report is available from Markit.