Employers Struggle To Find Job-Seekers Drives Up Wages

July’s Report on Jobs published by The Recruitment and Employment Confederation (REC) and KPMG reports great news for job seekers, employers increasingly struggle to find job-seekers driving up wages as a result.

Drawing on original survey data provided by recruitment consultancies July’s Report on Jobs indicated a record drop in availability of job-seekers coupled with a demand for staff fuelling a sharp increase in starting salaries.

The report reveals a greater number of people were positioned in permanent and temporary roles during July. However, permanent staff availability fell even further since last month’s recorded drop.The difficulties faced by employers to find job-seekers accelerated at the sharpest level since the survey started in October 1997; meanwhile Temporary/contact staff availability decreased at the fastest pace since March 1998.

REC also reported hiring intentions have continued to improve and that 76% of employers plan to increase their permanent employees in the next three months. Available job vacancies are continuing to rise rapidly, with growth accelerating at the fastest rate in five months.

The National Institute of Social and Economic Research (NIESR) reported a “welcome development” that the jobless rate is expect to continue to fall to 5.8pc by the end of 2014. In addition, the average starting salaries for people placed in permanent jobs continued to rise strongly in July.

However, the latest ICAEW/Grant Thornton business confidence monitor index fell to 32.3 this quarter from 37.3 last quarter. But on a positive note this is still a high reading with the figures published alongside a survey showing housebuilders enjoyed the 15th consecutive month of growth amid a resilient housing market.

Construction output has delivered a strong performance, thumping economist forecasts. In June alone, output in the construction industry rose by 1.2pc compared with May. That saw the Office for National Statistics (ONS) update their estimate for second quarter construction growth to flat from the previous three months, up from a 0.5pc drop.

The impact of course is that construction workers were the most in-demand; the rate of job creation in July across the construction sector was the fastest since 1997.

Kevin Green, CEO at REC, said the demand for staff in UK construction shows: “the industry is rising out of the recession”. However, without the availability of skilled labour to support the recent growth streak: ” we can’t build the new homes and infrastructure that this country desperately needs”.

It is vital that employers do more to solve UK’s skill and talent shortages than just offering better salaries, especially when it comes down to the most sought-after skills. Companies need more training and development programmes for their employees. Investing in staff development will help companies attract and retain talent.

Summary

  • Stronger growth of permanent and temporary staff appointments
  • Employers struggle to find job-seekers
  • Starting salary growth close to June’s survey-high

The Regions

Each of the four English regions covered by the survey registered higher permanent placements in July, with the sharpest growth in the South. The Midlands posted the strongest expansion of temp billings during the latest survey period, with growth there considerably faster than in the other regions.

Public/Private Sector

Private sector demand for staff remained stronger than that in the public sector. The strongest overall rise in demand was recorded for private sector permanent employees, where growth was at a five-month high.

Staff Categories

  • Construction workers were the most in-demand type of permanent employees. 
  • Followed by Engineering staff.
  • All categories recorded strong rates of growth.

Report on Jobs Kevin Green-REC

Kevin Green, CEO at REC

“The jobs market continues to go from strength to strength with a further increase in the number of people finding new jobs last month, and both starting salaries and hourly pay rates continuing to grow.

“Over a third of recruiters report they secured higher salaries for candidates they placed into permanent jobs in July, than for the equivalent roles in June.

“The UK’s post-recession problem is skill and talent shortages. The economy is going to be constrained by this ongoing talent crisis if employers keep doing business as usual. Hirers need to take on more young people and train and develop their employees like never before. Investing in staff development will help companies attract and retain talent. And our policy makers need to put politics to one side and take a sensible approach to immigration which focuses on helping British businesses get the skilled people they need.”

Commenting on the fact that the construction sector topped the tables for demand for both permanent and agency staff Kevin Green added:

“The demand for staff in UK construction shows the industry is rising out of the recession. But without more people skilled, available and willing to take jobs as site managers, joiners and electricians we can’t build the new homes and infrastructure that this country desperately needs.”

Report on Jobs Bernard Brown-KPMG

Bernard Brown, Partner and Head of Business Services at KPMG

“For the first time in months we are witnessing churn in the labour market. It seems that employees are finally beginning to wake up to the opportunities available to them, with the rates of growth of both permanent and temporary placements accelerating simultaneously for the first time since the winter.

Perhaps it’s true that ‘every person has their price’ because the movement in labour is coinciding with another rise in starting salaries.  Just a few months ago employers couldn’t tempt staff to switch roles, but indications are that employees’ caution over change is being replaced with hunger for something new.  It’s particularly prevalent in the Midlands; all the indications are that if you want a new job and want an improved salary offer, the central part of the UK is the place to be.”

Summary: Jessie McGee

Previous Reports

June Report
May Report

April Report

March Report

February Report
January Report

Image courtesy of Salford University

Mike Sandiford
Head of Partnerships
enquiries@jobstheword.co.uk
0207 193 9931

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