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Applicant shortage continues to push up salaries, says REC

Category: Industry News, Finance, salary, placement

Applicant shortage continues to push up salaries, says REC

Demand for employees rises at fastest pace since 1998

Job vacancies increased at their fastest rate for 16 years in August as employer demand for staff has grown rapidly, according to the Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.

The market survey also revealed that hiring organisations were reporting problems with candidate shortages, which has pushed up salaries.

Permanent candidates were in particularly short supply, with recruiters witnessing a steep drop in availability in August, although the lack of applicants had eased from record shortages in July.

REC chief executive Kevin Green said that the findings showed that while government figures show that immigration has increased, “this clearly has had little impact on the jobs market”.

Recruitment rose among both private and public sectors employers, although private sector hiring increased more sharply.

The rise in the number of permanent placements on offer remained strong in August even though it had dropped from the five-month peak in demand recorded in July. Employers requiring staff to fill temporary roles also continued to rise but not as fast as at the peak of the demand increases seen in May.

“It’s more great news for people looking for work this month, as we see more people being placed into jobs across all regions and sectors including construction, IT and engineering,” said Green.

“The jobs market is often criticised for being London-centric but our data shows that rates of growth for both permanent starting salaries and temp pay rates are faster in the South, Midlands and North [in August]. Recruiters tell us that the driver behind this increase is the competition to attract and retain the skilled people outside London.”

Green also urged the government to revisit its policy on visas for immigrants who want to work in the UK, saying: “As skills shortages increase and employers struggle to find the people they need, politicians from all parties should focus on ensuring that we have a visa and immigration regime that supports UK businesses.”

Bernard Brown, partner and head of business services at KPMG, said: “Just when it seemed the UK’s economy had definitely turned a corner, a couple of warning shots have been fired across the bows of British business to suggest that everything is not quite ‘ship shape’. Jobs are still being offered, and are still sought after, but today’s figures show that permanent and temporary placements have eased in recent weeks. It may be down to holiday season, yet with these figures following the latest manufacturing output data which also revealed slower growth, it wouldn’t be surprising if the confidence expressed earlier in the year is reaching a peak.

“The problem is exacerbated by the fact that employers still cannot find staff with the right skill set. Their desperation to fill recruitment holes is leading to continued wage growth, which is creating a market that is both unsustainable and unrealistic.”

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