Highest candidate shortage since 2004

March’s ‘Report on Jobs’ published by The Recruitment and Employment Confederation (REC) and KPMG today showed a faster increase in permanent salaries but that temporary pay growth had eased. There was also a  sharper decline in candidate availability with the growth of staff appointments remaining strong.

Up-date Friday 11 April 2014

The Telegraph features an article today on the Hays report which highlights 25pc growth in UK placements. Paul Venables, finance director, said: “The acceleration of growth exceeded our best expectations. We saw 1pc growth three quarters ago, then 2pc, then 3pc so this is a big pick-up. Accounting and finance has also risen 21pc which is important because no company wakes up and suddenly decides, ‘We need to hire more finance people’.”

He added the growth was nationwide, with regions such as the Midlands growing 33pc. London saw 8pc growth, and banking, one of the hardest hit sectors in the crisis growing 2pc. Companies that previously would have held off filling vacancies created by people leaving are now looking to fill them straight away. Read the full article here.


  • Starting salaries for people placed in permanent jobs increased strongly in March, with growth picking up to the sharpest since July 2007. However, temporary/contact staff pay increased at the slowest rate in five months.
  • Permanent staff availability fell at the sharpest rate since October 2004, while the latest drop in temporary/contract staff availability was the fastest in almost 10 years.
  • Permanent and temporary appointments rose at slower rates rates of growth in both permanent, with temporary staff appointments easing during March, but remained strong overall.
  • Further marked increase in vacancies demand for staff continued to rise at a marked pace in March, with the rate of expansion only just shy of January’s 15-and-a-half-year high.

The Regions

Marked increases in permanent placements were recorded in each of the four English regions monitored. The strongest growth was indicated in the North, although this region showed the slowest growth for short term staff billings, which was led by the Midlands. In the South of England the availability of permanent candidates fell for the ninth month running, its fastest rate since November 1997, with the demand for permanent staff at the highest rate since March 1998.  As a result, salary growth for permanent staff is at the highest in more than 13 years.  Growth in demand for temporary staff remained marked, almost matching January’s 15-and-a-half year record. The number of temporary staff placements in the South rose at the fastest rate in seven months, but supply of candidates fell for the seventh consecutive month. The rate of decline slowed from February’s 159-month record, but remained strong. The report said salary growth was the strongest since September 2000, with permanent salary growth for new starters in the South accelerating in March. Average starting salaries in the South have risen continuously for the past 21 months.

Public/Private Sectors

Private sector demand for staff remained stronger than that in the public sector during March. The fastest growth was signalled for private sector permanent roles, although private sector temporary vacancies also recorded a strong rise. In the public sector, solid increases in demand were seen, with public sector positions registering a faster rise than private sector roles.


Staff categories

Demand rose for all nine types of permanent staff in March. Engineering workers continued to be in high demand, with Blue Collar employees to slowest growth sector, Engineering and Blue Collar were in second and third places respectively in the demand for staff ‘league table’. Nursing/Medical/Care led a broad-based expansion of demand for temporary/contract staff in March.


REC Director of Policy Tom Hadley

The trend of growth in people finding jobs across all industrial sectors and regions continues. Starting salaries and hourly pay rates are up as employers battle to entice the talent they need. As real wages begin to rise across the jobs market people will start to feel better off.

However worsening candidate shortages mean that the number of people available to fill both temporary and permanent jobs is falling at the sharpest rate in nearly a decade. We have a core group of long-term unemployed people whose skills don’t fit with current vacancies and are unable to access the jobs market.

As well as up skilling UK workers, the government needs to take a joined up approach to immigration. A priority is addressing the restrictions on visas for highly skilled workers, which would allow businesses to access the people they need to grow and create jobs for more British workers.


Bernard Brown, Partner and Head of Business Services at KPMG

Britain may not yet be near the levels of full employment that Chancellor George Osborne committed to last week but, with permanent and temporary placements remaining strong, anyone looking for a new job must be increasingly confident that their search will soon be over. It’s particularly encouraging to note that employers are focusing on full-time employment, with more organisations offering contracts for permanent positions than temporary roles over the past month.

It also appears that employers are attempting to encourage candidates to move away from the short-term mentality of temporary roles by raising the bar with the starting salaries aligned to permanent positions. Today’s data shows ‘offer salaries’ picking up at their sharpest pace for almost 7 years, whilst contract staff saw their pay increase at the slowest rate since November 2013. It’s a welcome sign that employers have enough confidence to commit their balance sheets to long term employment plans.

If that wasn’t a clear enough indication that employment is on the up, the data also shows that demand for staff continues to rise. Marginally up on the figures for February, the latest data suggests that engineering, construction and IT are the sectors hungriest for talent. It’s all good news, but the next step will be for candidates to put themselves forward for the role on offer – something they still seem unwilling to do.

Full report is available from Markit here

Mike Sandiford
Head of Partnerships
0207 193 9931

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