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October REC Job Report: Starting salaries continues to rise further with increasing demand for Accounting staff

Posted on 19/11/2019 by Fuad Tamjeed

R Ec Report Picture

Key Findings:

  • Starting salaries and temp wages both rise further
  • Short supply of finance professionals across the board
  • Temp billings growth weakened to only marginal pace
  • Permanent placements fell during the month

Pay Pressures:

There was a further steep increase in salaries awarded to permanent joiners in October. This was despite the rate of pay growth easing slightly since September. Higher salaries were offered in order to attract and secure suitably skilled staff.

Average hourly pay rates for temporary staff increased for the eighty-first month in a row in October. The key factor behind this growth is greater competition among companies for scarce candidates.

Placement Variations:

October experienced a further upturn in billings received from the employment of short-term workers. The reason for this is firmer demand for temporary staff, which in many cases was due to firms choosing to hire short-term workers as opposed to permanent ones.

Permanent staff appointments fell further across the UK in October. The rate of contraction quickened to a solid pace that was the second quickest since July 2016, when placements fell following the Brexit referendum. Heightened uncertainty regarding Brexit had led clients to cancel or postpone staff hiring.

Job Creation and Vacancies:

The rate of vacancy growth eased further across the UK in October. Data broken down by job type pointed to softer growth of demand for both permanent and temporary workers during October. The rate at which permanent vacancies expanded was the slowest since the start of 2012 and modest overall. Demand for temporary staff increased at the second-weakest pace since July 2012.

Staff Availability:

The UK registered a sustained decline in total candidate availability at the start of the fourth quarter. The rate of contraction was the quickest recorded for four months and sharp overall. The reduction was predominantly driven by a marked fall in permanent staff supply, as the downturn in temporary candidate numbers softenedAuditors, Accountants, Credit Controllers and Bookkeepers were in short supply, increasing the need for these job roles.

Regional and Sector Variations:

Higher temp billings were recorded in the Midlands and the North of England, while declines were seen in the South of England and London. Permanent staff appointments declined sharply across the Midlands, the South of England and London in October. In contrast, the North of England registered a solid increase in permanent placements.

The South of England saw the most marked increase in starting salaries, followed by London. Stronger rates of wage inflation in London and the South of England contrasted with softer increases in the Midlands and the North of England.

The overall increase in staff vacancies in October was driven by the private sector, as demand for workers fell across the public sector. Growth of demand for both permanent and temporary staff in the private sector cooled and was notably weaker than this time last year. Permanent public sector roles fell solidly, while a modest drop was seen for temporary vacancies. The only two sectors to record reduced demand for temp workers were Executive/Professional and Construction.

Comments made by Neil Carberry, REC Chief Executive:

“These figures underline why this needs to be a jobs election. The labour market is strong, but permanent placements have now dropped for eight months in a row, and vacancies growth has fallen to its lowest level since January 2012. One bright spark is the temporary labour market, which continues to provide flexible work to people and businesses that need it during troubled times. Ending political uncertainty and getting companies hiring again is vital – but we must also look to the long-term future of work. Jobs must be front and centre during this election campaign, and we will be launching our REC manifesto for work next week. We will be urging all political parties to run on policies which support and enhance the UK’s flexible labour market – allowing businesses to create jobs, employees to build careers and the economy to grow.”

Comments made by Karl Edge, Midlands Regional Chair at KPMG:

“The job market in the Midlands saw a continued fall in permanent placements last month, as political uncertainty continued and for many, recruitment decisions remain on hold. With the Christmas period fast approaching, the decline in temp labour is one to watch, as typically, retailers and warehouses ramp up their hiring around this time to manage the Christmas shopping rush. Those who are in the market for either a temporary or permanent role will be pleased to know that salaries and wages are on the rise, due to increasing competition for talent, so now is a good time to negotiate a great package.”