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Report On Jobs; Rate of Pay Inflation eases in November

The Report on Jobs by the KPMG and REC is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies, such as the Redline Group, and employers to provide the first indication each month of labour market trends. Here are the main findings for November.


  • Pay inflation eased to a 19-month low.
  • Weakest increase in overall vacancies for 21 months.
  • Engineering remains among sectors seeing an increased demand for permanent staff.

Starting pay for new permanent joiners increased at the softest rate since April 2021. However, contract/temp wage inflation moderated to an 18-month low in November. At 1,225,000, total vacancies in the UK economy was the lowest figure for a few months. Nevertheless, vacancies remained elevated by historical standards, at nearly 50% higher than the number recorded before the pandemic. The total candidate supply continued to fall during October, with the latest fall in numbers being the weakest recorded for just over a year-and-a-half.

The seasonally adjusted Total Vacancies Index dropped to 54.1 in November, from 56.7 in October, and showed the weakest increase in overall vacancies for 21 months. However, the number remained above the neutral 50.0 level. Speaking about this, Neil Carberry, Chief Executive of the REC said: “While permanent recruitment activity has dropped from the very high levels of earlier in the year, the pace of that drop has tempered this month. In contrast, temporary hiring has accelerated again in the run-up to Christmas. There are clearly some seasonal factors at work here. But there may also be some switching to temporary going on, as firms maintain flexibility ahead of next year.”

Drop In Placements and Skills Shortages:

Lower permanent placements were reported, and recruiters cited low candidate supply, along with greater caution around the economic outlook as the reasons behind the reduction. The latter reportedly led clients to become more hesitant to hire and candidates more reluctant to take up new roles. Claire Warnes, Partner, Skills, and Productivity at KPMG UK said: “This reflects the combined effects of employers reining in recruitment, candidate availability continuing to decline, and workers staying put for job security. Despite the cost-of-living pressures that households are enduring and the industrial relations impasse within many sectors, wage growth may well be trending down in the months ahead. Employers who are able to offer existing workers and candidates’ opportunities to upskill and reskill, rather than focusing solely on core pay, may well benefit most in this tight jobs market.”

Despite the general downturn in hiring activity, the overall demand for workers expanded at the softest rate since February 2021. Ten broad job categories registered increased demand for permanent staff during November, with Engineering being the sector with the third-highest rate of growth. The rate of growth was particularly interesting, in respect to skills shortages in Design, Electrical, Mechanical, and Technical engineering roles. Contract / temporary skills shortages on the other hand revealed higher demand for design and software engineers, developers, and cyber security professionals.

Future Outlook:

With the new year just around the corner, high levels of job vacancies persist, and candidate supply continues to shrink. Much like the last month, the UK unemployment rate continues to remain at record lows and skills shortages are still a key problem for the economy. This analysis is backed up by the latest data from the Office for National Statistics (ONS) as signs of a tight labour market continue to be seen. The UK unemployment rate for July to September 2022 decreased by 0.2% in the quarter. At 3.6%, it remains close to record lows. Economic inactivity rate, however, rose again by 0.2% to 21.6% in the same period, despite high levels of unfilled vacancies.

The Institute for Employment Studies points out that the UK is one of the only five developed economies where employment remains lower now than it was before the pandemic. Labour shortages are holding back growth, adding to inflationary pressures, and leading to lower living standards for more people. The competition for talent is not only affecting productivity but also affecting pay. Neil Carberry had this to about the situation: “A flatter period in the labour market is inevitable in this current economic climate, but demand is being supported by some major underlying factors, including labour shortages and technological change. The main way to boost performance is to unlock growth by businesses putting their people planning first, as a strategic way to enhance productivity. Government can help through skills and immigration reform. Boosting growth is the only way to ensure a prosperous country for all of us.”

The need for growth is evident, with the UK GDP estimated to have fallen by 0.6% in September, after a fall of 0.1% in August 2022. Businesses and Governments should work together to boost labour supply via a joined-up workforce strategy to deliver the skills where they are needed and create the capacity for the economy to grow. Recruitment professionals are vital in this process, as they understand demand across sectors and know what skills are most sought after in a competitive market.

Redline Group continue to be one of the UK’s most trusted Electronics and High Technology recruitment specialist for professional Contract, Permanent and Executive positions. With four decades of experience in knowledge-led recruitment, Redline is perfectly positioned to offer advice about future-proofing your permanent, contract, and interim needs in the technology sector. For more information about this month's report, call David Collins on 01582 878804 or email him on



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