The regular report from KPMG and REC has been somewhat overshadowed by the news that for the second month in a row US figures show that the growth in jobs had been weaker than expected. For the UK it is a different story with vacancies now rising at the fastest pace since May 1998, alongside further falls in staff availability.
Summary of the KPMG/REC Report
Overall job vacancies rose at a sharp and accelerated rate in January with the pace of expansion the fastest in over fifteen-and-a-half years. Growth of temporary billings rose at a rate only marginally slower than December’s 15-year peak, signalled in each of the English regions during January. The strongest rate of expansion was indicated in the North, followed by the Midlands. Further falls in staff availability were signalled with both permanent and temporary candidate numbers declining at marked rates, albeit the slowest in three months.
The rate of growth of permanent staff salaries remained elevated at the start of 2014, holding at a pace broadly in line with December’s six-year peak amid declining availability of candidates.
KPMG/REC report that permanent staff placements have continued to increase strongly in January, although the pace of expansion has now eased from the 45-month (six-year) high recorded in December. Marked increases in permanent placements were signalled in all four monitored English regions, with the South posting the steepest rise.
Demand for staff rose in both the public and private sectors during January, with the latter registering the faster growth. In both sectors, permanent staff saw a stronger improvement in demand for their services than temporary workers.
Engineering remained the most in-demand category for permanent staff in January, closely followed by Construction. Demand rose for all nine types of temporary/contract staff in January. As was the case for permanent employees, the strongest rate of expansion was indicated for Engineering workers. The slowest growth was signalled in the Construction category.
Bernard Brown, Partner and Head of Business Services at KPMG
“Employer confidence continues to grow, with the thirst for new staff hitting a fifteen-and-a-half year high in January. In a week showing improvements to UK construction figures and growth across the Eurozone manufacturing industry, it shouldn’t come as a surprise if other sectors begin to report peaks in performance.”
“Yet no one should be fooled into thinking that the road ahead will be easy to travel. Earlier this week markets across the globe fell as investors were rattled by weak data. It’s unlikely to herald a crisis, but should serve to ensure employers remain vigilant to business threats.”
“The warning has been noted by employees because, although jobs are being created, January saw another decline in the number of people putting themselves on the jobs market. The preference seems to be for temporary roles, suggesting that employees are adopting a ‘try before you buy’ mentality before committing to long-term roles.”
Tom Hadley, REC
“The squeeze on people’s finances continues to dominate the news but this month’s data shows there is hope for workers. All regions around the country are seeing permanent starting salaries and hourly pay rates continue to grow driven by skills shortages across an ever growing range of sectors.”
“Britain’s building boom and major infrastructure projects have seen demand for permanent construction and engineering workers soar this month – however recruiters are struggling to source skilled people to satisfy this demand.”
“The report shows many of the latest in-demand roles are being sought by employers looking to invest in staff to build their businesses including customer services, marketing and sales roles, although there are skills shortages across all sectors. This again underlines just how critical the issue of skills shortages is becoming, as businesses will not be able to contribute to economic growth if they cannot find the skilled workers they need. Part of the solution is to develop a careers guidance network that is fit for purpose and raises awareness of growth sectors and current and future skills needs.”
National Institute of Economic and Social Research ‘Prospects for the UK Economy’ paper was also released on 7 February. Main points are:
- The economy will grow by 2.5 per cent in 2014 and 2.1 per cent in 2015;
- Unemployment will drop through the Bank of England’s 7 per cent threshold early this year;
- CPI inflation will be marginally above target this year, dropping below target in 2015;
- On current plans the public sector finances will be in surplus in 2018-19.