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December REC Job Report: Demand for workers increases the most in 21 years

Posted on 29/01/2019 by Krishna Patel

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Key points:

  • Demand for workers saw the most significant incline since the survey first started 21 years ago
  • Candidate supply continues to drop further
  • South of England saw the most placements, both permanent and temp 

Placements rates and staff demands:

Recruitment agencies marked a further decline in availability of candidates. The reduction in supply of permanent staff quickened since November, whilst short term staff levels fell at a softer pace. This had a knock-on effect with the rate of permanent placements; though there were a substantial number of placements, the rate was the softest experienced in 20 months. Temporary placements rose at a quicker rate compared to November’s joint 25-month low.

Vacancies for both long-term and short-term roles increased, across the whole of the UK in 2018. Growth for demand of both types of workers was, on average over the 21 years the survey has been taken, much more significant than ever seen before. Starting pay continued to rise during December as workforce supply was insufficient to meet the demand of new employees, inflation of pay being quicker for permanent placements compared to temps.

Regional and sector distinctions:

The South of England saw the biggest increases in permanent staff appointments and temp billings, with the remaining three regions also seeing significant increases in temp billings but slightly milder expansions of permanent appointments.

‘Vacancies for both private and public sector staff increased further in December.’

Between the two sectors, the private sector saw the sharpest increase in demand for both temporary and permanent workers, followed by demand for permanent staff in the public sector and lastly short-term staff in the public sector. Amongst the job categories, the Accounting & Finance and the Engineering sectors had the biggest demand for permanent staff and the Blue Collar sector remained the most in demand for temp workers.

Neil Carberry, Recruitment & Employment Confederation chief executive, said:

“It’s no surprise that growth in new permanent jobs dropped to its lowest level in almost two years last month, because economic uncertainty is now affecting companies’ hiring plans. But the underlying strength of our labour market is still there – vacancies are high and temporary placements rose in the run-up to Christmas. There are opportunities out there for people who want to change job in 2019.

“Businesses will be looking for certainty on Brexit plans soon, so that they can get on with driving growth and jobs. Recruiters will be helping employers to do that – high employment rates mean that there are significant shortages in some parts of our labour market.

“The pre-Christmas rush put a squeeze on logistics jobs in December so it was no surprise to see blue-collar roles topping the skills shortage list in this survey. Accounting, engineering, hospitality and healthcare all stand out as shortage sectors in today’s data.

“Continuing to fill roles like these in the coming months will be critical, so it is vital that the Government’s proposed new approach to immigration can fill shortages at all skill levels. But businesses can also help, by opening up career paths through more inclusive hiring practices as well as focusing on improved workplace training and links with education. Recruiters are uniquely placed to help employers with future workforce planning whatever the UK’s future relationship with the EU looks like.”

Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:

“A lack of work ready candidates is really beginning to bite UK businesses and the situation is worsening.  Many of the UK’s main sectors are now struggling to hire staff.  It really is a candidate’s market at the moment.

“A lot of people don’t want to move jobs right now because there is so much uncertainty around.  In addition, the supply of EU citizens entering the UK for work is slowing whilst every sector continues to take on more staff.  This means a near-record number of vacancies are going unfilled and talent gaps in industries like engineering, finance, and IT are opening up.

“December is always a bit of lean period in the jobs market but Brexit has amplified that effect.  Consequently companies are having to offer increasingly attractive and creative packages to tempt new talent on board.  If you aren’t looking forward to another year in your current job, now is a good time to go job hunting.”

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