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REC Report on Jobs shows December rise and new skills shortages

Highlights include:

Stronger growth of permanent placements

Temp billings increase at sharpest rate in three months

Strong pay growth underpinned by tight candidate availability

Permanent placements rise at faster rate&hellip

Recruitment consultants signalled a further increase in permanent staff appointments during December. The rate of expansion was strong, having picked up from November’s 18-month low. However, the number of job vacancies available to people seeking permanent roles rose at the slowest pace since July 2013.    

...while temp billings growth also accelerates

Short-term staff appointments increased at a sharper rate in December. The latest rise in temp billings was the strongest in three months. 

Pay growth remains marked

Average starting salaries awarded to people placed in permanent jobs continued to rise, with the rate of growth little-changed from the strong pace recorded in November. Temp pay meanwhile increased at the sharpest rate in three months.

Candidate availability remains tight

The availability of staff to fill permanent job roles continued to fall in December. Although easing to the slowest in eight months, the rate of deterioration remained marked. Temp availability decreased sharply, with the latest reduction faster than that recorded in November.

Regional and sector variation

The fastest growth of permanent staff appointments was indicated in the South of England, while the slowest rise was signalled in the North.

In contrast to the trend seen for permanent placements, the strongest growth of temp billings was signalled by Northern-based agencies, while the South posted the slowest expansion. 

Private sector demand for staff remained substantially stronger than that from the public sector in December. Private sector permanent staff posted the fastest increase overall.

Accounting/Financial topped the demand for staff & lsquo;league table’ in December, ahead of IT & Computing and Secretarial/Clerical. The slowest rise in demand was signalled for Construction workers.

Higher levels of demand were signalled for all monitored types of temporary/contract staff in December. The joint-strongest rates of growth were reported for Nursing/Medical/Care and Blue Collar workers.

Kevin Green, REC chief executive, says, “As we enter 2015 the jobs market continues its strong performance. Recruiters are helping an increasing number of businesses find new permanent employees, and skills shortages in most areas of the economy mean that competition for quality candidates is driving up starting salaries.

“Economic growth for 2015 looks sustainable, however the concern now is that political uncertainty could spook the market as we approach a general election. The prospect of increased government intervention in the labour market as promised by the Left, questions around Britain’s position in the EU which are being posed by the Right, and the potential for protracted negotiations around a hung parliament come May could affect business confidence and hence future hiring.”

Bernard Brown, partner and head of business services at KPMG, commented, “A strong year for the UK jobs market finished with a flourish as temporary roles saw an upswing in popularity.  More than 1 in 3 recruiters suggest that employees looking for short-term roles are being increasingly spoilt for choice as organisations search for help in an effort to fulfil customer orders.

"Good news for candidates also extends into the pay packet.  Once again, a shortage of skills in key areas has led to a rise in the starting salaries on offer.  It could mean that 2015 becomes the year in which the candidate finally becomes king.”&emsp

Greet Brosens, group sales director at Adecco Group UK & Ireland, said, “While the UK is currently experiencing growth, the figures show that more needs to be done to ensure that businesses have access to the skills they need.

“The skills gap continues to increase, not just in the sectors with a traditional shortage of skills such as engineering, but across the majority of professional areas, including accounting and finance.

“Whilst we need to continue to focus on home grown talent, we must acknowledge that we do not produce talent quickly enough to keep up with the growing economy and restricting foreign graduates access to the labour market will only hurt UK plc.

“A more practical approach to dealing with foreign skills is urgently needed, in addition to a continued effort in developing our own home grown skills.”

The report provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies. 


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