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Candidate availability still holding back industry

The latest Report on Jobs for September 2019 from the KPMG and the Recruitment & Employment Confederation (REC) reported a decline in permanent placement, the steepest recorded since July 2016.

The report is a good indicator of the impact that our current climate of political uncertainty and economic ambiguity has had on hiring intentions over the last three years. The report implies that despite labour market conditions softening in August, the jobs market  remains fairly robust.

Furthermore, Neil Carberry, Chief Executive of the REC comments “While we continue to benefit from the flexibility of our jobs market as demand for contractors and temporary staff holds steady, today’s survey emphasises the real-world impacts of the political and economic uncertainty businesses are facing” He further adds, “The first priority should be avoiding a damaging no-deal Brexit and giving some stability back to British businesses, so they can drive the prosperity of the whole country”.

The main finding for August was:

  • Permanent placements dropped for the sixth consecutive month partially due to Brexit-related anxiety. Alongside that, contract and temporary billings continued to rise.
  • Slowest increase in job vacancies since January 2012. The demand for both permanent staff and contractors alike slipped; the former growing at the slowest rate for the last seven years and the latter at the softest pace for the last decade.
  • Starting salaries for permanent staff continued to increase in August as a result of greater competition for skilled professionals.

The latest official data from the Office National Statics (ONS) showed the UK employment rate was estimated at 76.1%; this is the joint-highest on record since comparable records began in 1971, and higher than a year earlier (75.5%). The UK unemployment rate was estimated at 3.8%; this is lower than a year earlier (4.0%) with average weekly earnings increased to 4.0%.

Candidate availability continues to tighten

August marked yet another month where candidate availability for permanent and contract/temporary reduced, with the biggest drop being felt in the permanent sector.

Arguably one of the main issues plaguing the candidate pool is a shortage of skills with a greater reluctance among candidates to look for new opportunities This is especially apparent in IT & computing jobs, engineering and finance where quality candidates now come at a premium.

In 2018, the government declared the Year of Engineering was upon us, but the Report on Jobs demonstrates that a year later, there is still a significant skills gap in high-tech and engineering industries with Mechanical Design, Software Development, Electronics Engineering jobs proving difficult to fill. There is also a recognition that more could and needs to be done to promote the possibilities of careers in the engineering sector.

One of the many solutions offered to remedy this shortage of skills has been to increase the attention given to young people and women within STEM  to encourage the interest of what is often considered a minority in a male-led workspace.

Though the report highlights continued uncertainty towards the current job market, James Stewart, Vice Chair at KPMG notes “the latest decline in staff supply was the least marked for over two and a half years amid greater competition, softening the pressures on pay”.

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