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Further rapid increases in starting pay - April's UK Report on Jobs

April 2022 – Tight labour market conditions lead to further rapid increases in starting pay

The main findings are:

Permanent placement growth slips to 13-month low

Recruitment consultancies across the UK registered further sharp rises in both permanent placements and temp billings at the start of the second quarter amid reports of rising activity at clients and robust demand for staff.  That said, the rates of growth eased to 13- and 12-month lows, respectively, as low candidate supply constrained the overall upturns in hiring activity.

Slower, but still rapid, reduction in candidate availability

The overall availability of candidates fell for the fourteenth month in a row in April.  The rate of contraction was substantial and much quicker than the series average, despite softening to the weakest for three months.  The supply of permanent labour continued to fall at a faster pace than that seen for temporary staff.  Recruitment consultancies often mentioned that candidate numbers had fallen due to tight labour market conditions, fewer foreign workers and hesitancy to seek new roles due to the pandemic and geopolitical uncertainty.

Substantial increases in starting pay for both permanent and temporary workers

A combination of robust demand for staff and scarce supply drove further marked increases in starting pay during April.  Notably, the rate of starting salary inflation weakened only slightly from March’s record pace (which was the strongest since data collection began in October 1997).  Temp wage growth also eased on the month, but remained historically sharp.

Total vacancies continue to rise sharply

Recruitment consultancies signalled a further steep increase in overall vacancies during April, despite the rate of growth easing slightly since March.  Permanent staff demand continued to rise at a slightly quicker pace than that seen for temporary workers.

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said:

“The labour market has been tightening for months on end, driving near-record growth in starting salaries for new staff. With vacancy numbers also historically high, this is a great time to be looking for a job – and a pay rise to help meet the rising cost of living. “The number of job placements being made is still growing, but at a more stable rate. Growth is now at its lowest level for a year. This is no surprise, given how hot the market has been. Employers need to get their offer to candidates right if they are going to succeed in this market. Enhancing diversity and inclusion, and effective early career hiring are also important elements of a winning approach – consulting a recruitment expert can help with all of this.”

Commenting on the latest survey results, Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said:

 “Yet again in April, recruitment challenges abound in every region and every sector of the economy. Employers continue to be relentlessly challenged by attracting and retaining talent, rising costs due to inflation, as well as supply chain pressures. Skills and employment are a key pillar of “levelling up”, yet the recruitment data shows that a one size fits all approach is unlikely to succeed. The regional and sector variations we have seen over the past 12 months of jobs data provide clear evidence that long-term skills development strategies with employers working with all levels of government are urgently needed.”

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 IHS Markit and sponsored by the Recruitment and Employment Confederation and KPMG LLP.  The full copy of this report is available from IHS Markit.

Mosaic Search & Selection Ltd – Executive Search for the Publishing, BPO and Financial Services industries.

  Contact us today to discuss your senior level recruitment needs

 

 

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