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Candidate shortages fuel a rise in starting salaries

10/09/18 Nick Livingstone Managing Partner

The latest figures from the Recruitment and Employment Confederation’s (REC) monthly publication produced by IHS Markit ‘Report on Jobs’ – reported Permanent staff placements rose at the steepest rate for five months in August amid reports of robust demand for staff. 

Key points from the August survey:

  • Stronger expansion in permanent placements, but contract/temporary billings growth softens
  • Starting salaries increase at the second-fastest rate in over three years 
  • Staff vacancies continue to rise at a historically marked pace

Demand for staff remained strong during August. Notably, vacancies expanded at a pace that was only fractionally slower than July’s eight-month record. Encouragingly, steep increases in demand were seen across both permanent and contract job categories.

Average starting salaries awarded to newly-placed permanent staff rose at the second-sharpest pace for over three years in August. At the same time, contract and temporary pay rates also increased strongly, despite the rate of inflation softening from the previous month.

Of the ten broad job categories monitored by the survey, IT & Computing jobs once again led the rankings for permanent jobs in demand during August, followed by Engineering jobs ranking second.

The August survey data signalled a further steep contraction in the availability of professional staff for permanent positions, including a shortage of Aerospace Engineers, Automotive Engineers, Mechanical Design Engineers, Electronics Engineers, and Engineering Technicians.

Neil Carberry, Chief Executive at the REC says:

“Businesses are getting on with it driving Britain’s growth – jobs are being created and starting salaries are rising. There are big opportunities out there for candidates right now looking for a new role.

“But how long our labour market can defy gravity if the shape of our future trading arrangements with the EU remain unclear is the big question. Companies are starting to implement contingency plans now – and those who aren’t will need to step up progress.

“The biggest long-term question on jobs is how they will be affected by new technology and stiff price competition driven by value-conscious consumers. For recruiters, helping people find pathways from sectors like retail into growing sectors will both boost opportunity and address candidate shortages in key sectors.”

Nick Livingstone, Redline Group Director comments: “Despite all the doom and gloom surrounding the economy, the political backdrop, and Brexit uncertainty, the UK is booming with the economy growing 0.3% month-on-month. We are seeing more and more candidates having an optimistic outlook on the job market and their own career growth and are ready to change jobs as the economy grows.

In today’s world, talent is a key differentiator of the organisations that succeed and those that don’t. Companies must retain their top performers while attracting new talent. Given that work-life balance is an important factor for British workers, businesses looking to attract new talent should actively promote how they enable employees to achieve work-life balance via options such as flexible working hours, telecommuting, or the use of new technology.

There is also a great opportunity for us as specialist recruiters to forge new relationships with clients based on value and customer service excellence. Every week we’re contacted by new employers seeking our help as winning the war for talent becomes ever more important."

Redline has undertaken research into candidate offer to acceptance rations for many years. For a copy of our most recent research on the Offer Vs Declination Analysis, please click here

For more information regarding how we can help your business, please contact Redline Group on 01582 450054 or email