Hiring slows slightly as employers struggle to find candidates

Retail was one of the only sectors where demand for staff slowed


Growth in hiring slowed while salaries continued to rise during June, according to the Recruitment and Employment Confederation.

Its latest Report on Jobs showed that while permanent placements and temporary billings continued to rise, this was at a slower rate than in previous months.

This could be attributed to a further deterioration in the availability of candidates, according to the REC, which in turn has forced many employers to push up salaries to attract potential employees. Both permanent and temporary candidate availability declined at sharper rates at the end of the second quarter of this year, it said.

Demand for permanent staff reached a seven-month high in June, and salaries awarded to new permanent employees experienced a corresponding increase. Rates of pay for temporary and contract staff also jumped at a similar level seen to April, when rates of growth hit a two-year peak.

Neil Carberry, the REC’s new chief executive, said it was “a candidate’s market out there”.

He added: “Across the majority of sectors, both temporary and permanent opportunities are growing, and a lack of candidates means it is no surprise to see starting pay also rising.

“Recruiters report that some of this high vacancy rate may be driven by good demand from companies not being matched by candidate willingness to move in the face of the current economic uncertainty.

Demand for staff rose across both the public and private sectors at the end of the second quarter, though this was more marked in the private sector, according to the REC. The slowest rise was in demand for permanent public sector staff.

In terms of sectors, IT and computing experienced the highest demand for permanent workers, while blue-collar employers showed the greatest need for temporary staff. Demand for both permanent and temporary employees in retail stagnated, reflecting some of the recent turbulence affecting high-street employers.

“The one sector that stands out as in a different place is retail,” said Carbery. “Placements are stagnating as the sector reshapes quickly, driven by changing customer demand and stiff competition.

“But the type of customer service skills retail workers develop are in huge demand in other sectors, and the sheer size of our retail sector means there are still opportunities in stores.”

Demand for permanent roles was steepest in the Midlands, while the weakest was in London, the REC found.

Employers inflate starting salaries to attract hard-to-find staff

Employers are hiking up salaries in order to attract candidates amid severe staff shortages, according to the latest data from the Recruitment and Employment Confederation.

Its research found that salaries for workers moving into new permanent roles rose at their fastest rate for three years in May, while pay for temporary roles also continued to rise.

The REC’s report, which gathers data from 400 UK recruitment agencies, showed that – at the same time – the number of available suitable candidates for roles continued to fall.

According to policy director Tom Hadley, employers in sectors where skills shortages are particularly acute are having to “radically re-imagine” how they attract and recruit staff. These sectors include nursing, engineering, manufacturing and IT.

He said that employers would need to consider non-financial incentives to attract staff, such as offering more flexible working environments and better career opportunities.

He added: “Government can help by ramping up the UK skills base and ensuring a balanced and evidence-based immigration system.”

However, employer lobbying body the CBI said that salaries across the economy were rising only gradually when the pay of existing employees was taken into account.

Its latest economic forecast, published today, said that “any further pick up in real wages is likely to be modest, continuing to weigh on consumer spending throughout our forecast”.

According to pay analysts at XpertHR, pay awards were 2.5% on average for the fourth consecutive quarter in April, and the prediction is that pay awards for 2018 will be at their highest for almost four years.

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