January sees weaker growth in staff placements

The latest Report on Jobs has seen demand for staff reach a 17-month high as staff placements sees weaker growth.

The Markit/REC Report on jobs provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies about staff placements.

Permanent placements increase at softest pace in four months

January data signalled a further marked increase in permanent staff placements, despite the rate of growth easing to its slowest since September 2016.

Temp billings growth weakens slightly

Growth in temp billings remained sharp in January, in spite of the rate of expansion easing from December’s eight-month peak.

Candidate availability continues to tighten

Recruitment agencies continued to signal a drop in candidate availability at the start of 2017. While permanent staff availability declined at a slightly faster rate, the drop in temp staff availability was the slowest in three months.

Contributing to further upward pressure on pay

Permanent staff starting salaries increased at a sharp and accelerated pace in January, with the rate of inflation the quickest in nine months. At the same time, growth in temp pay rates weakened from December’s seven-month record.

Regional and sector variation

All four English regions monitored by the survey noted increased permanent placements in January, while Scotland saw a further decline.

Temp billings increased across all monitored regions in January, with the quickest rates of expansion seen in the North and the Midlands.

January survey data showed that growth of demand for staff remained considerably stronger in the private sector compared to the public sector. Furthermore, private sector permanent staff vacancies increased at the sharpest rate for a year-and-a-half at the start of 2017, though growth in demand for temp staff weakened slightly across the sector.

At the same time, public sector demand for permanent staff weakened to a modest pace in January, while public sector vacancies for short-term staff declined slightly.

Nursing/medical/care was top of the ‘league table’ in terms of demand for permanent staff in January, ahead of engineering and IT & computing. The weakest increase in demand was seen for Hotel & Catering employees.

Demand for temporary staff increased across almost all monitored sectors in January. The strongest growth was seen in nursing/medical/care, followed by Blue Collar. Meanwhile, demand declined modestly for construction workers.

REC chief executive Kevin Green says, ‘Employers are crying out for people to fill vacancies. Recruiters say that fewer candidates are available in all regions, and this is dampening jobs growth.

‘If businesses can’t find the people they need they will outsource abroad, automate activity or shut up shop, resulting in fewer jobs available to UK nationals.’

Green concludes, ‘The NHS is already in turmoil because it doesn’t have enough staff and the government’s decision to prioritise immigration control over the economy in their EU negotiations means that finding candidates will become yet more difficult in the future.

‘We agree that more can be done to encourage under-represented groups into work, including disabled people, single parents and older workers. But the idea that this will resolve the talent shortage is pie in the sky.’

Further reading on staff placements

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the Smallbusiness.co.uk and Growthbusiness.co.uk titles before moving on to be a Digital Technology reporter for the Express.co.uk.

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