Starting salaries rise at fastest rate since April 2015, as candidate availability continues to drop

The latest figures from the Recruitment and Employment Confederation’s (REC) monthly publication produced by IHS Markit ‘Report on Jobs’  – highlighted permanent staff appointments continued to increase with the demand for contract professionals also rising at a faster pace than in the preceding month.

Key points: 

• Starting salaries rise sharply amid steep reduction in candidate supply
• Permanent placements expand at slightly weaker pace
• Vacancy growth softens to near two-year low, but remains strong

Permanent staff appointments continued to rise at the end of the third quarter, albeit at a softer pace. Nonetheless, growth remained sharp in the context of historical data. In contrast, contract and temporary billings expanded at a slightly quicker pace compared to August.

Recruitment consultants reported continued difficulties regarding the availability of staff for both permanent and contract job roles. Although easing since August, the rate of deterioration in permanent staff availability remained historically high. The availability of contract professionals fell sharply, with the latest drop being the fastest in ten months.

Starting salaries for candidates placed into permanent jobs increased at the quickest pace since April 2015 during September. Hourly rates for contract and interim professionals also rose at a faster pace than in the preceding month.

As the demand for staff remains strong, September data pointed to a further rise in job vacancies for both permanent and contract roles. The rate of growth in staff demand was sharp overall, albeit the weakest seen for nearly two years.

Neil Carberry, Chief Executive at the REC says:

“UK businesses are resilient, but they’re struggling to find the people they need to drive growth and opportunity. Recruiters’ specialist skills help to address this, but with Brexit looming a comprehensive mobility deal with the EU will be needed to underpin prosperity. Higher skills investment, driven by a reformed apprenticeship levy, will also be essential.

“An effective approach to post-Brexit immigration must acknowledge that there is unmet need for roles of all sorts - not just those filled by the very highest earners. Keeping deliveries going, patients being treated and goods on the shelves means an open approach to workers from elsewhere. Businesses understand the need for control - but this is not in conflict with openness to those who come to contribute.”

IT and Computing jobs ranked first in the most in-demand category for permanent staff with technical and Engineering jobs ranking second.

According to the Office of National Statistics Labour Market report released in September, the number of people working rose by 3,000 in the past three months to 32.4 million. Over the same time period, the number of job vacancies rose to 833,000. This is the highest number of job vacancies since these records began. With more jobs available to candidates there is an increase in competition for businesses trying to attract skilled professionals.

The British Chambers of Commerce also reported in its quarterly economic survey that seventy-two percent of UK businesses reported recruitment difficulties, the highest on record.

David Collins, Redline Customer and Development Manager comments:

“Here at Redline, we are already witnessing an on-going surge in technology and engineering companies simply searching on Google for a ‘technical recruitment agency’, which has led to us taking on more new clients. Fundamentally, specialist professional recruitment is about saving cost and time for both technology employers and candidates and facilitating an effective knowledge-led process is vital. We are developing even closer relationships with our clients allowing us to combine market knowledge and specialist technical recruitment insights to build more informed and relevant hiring strategies.

Working with clients as a strategic recruitment partner enabled Redline to have a positive impact on the recruitment process and in the long-term improves client’s ROI. By thinking smarter, we ensure workforce planning and hiring strategies are aligned to achieve faster and better results - the talent is out there, and it takes efficiency, collaboration and the smart use of data and insights to ensure we are sourcing and selecting the right candidates for our clients today.”

To find out more about how we can help your business, please contact our dedicated Business & Customer Development Manager David Collins on 01582 878804 or email DCollins@redlinegroup.com.