This month’s Report on Jobs from the REC has shown permanent placements rising modestly while temp billings have gone up at a solid pace. The Report on Jobs: London contains original data from the survey of recruitment and employment consultants in the capital. The report is designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.
Permanent placements in London have increased for the fifth time in as many months during March. The rate of growth quickened fractionally from February, but remained modest overall. At the UK level, the rate of increase was marked, albeit slightly weaker than in February. The rise was broad-based across each of the five regions monitored by the survey, led by the South of England.
Recruitment consultancies in the capital recorded a further rise in average temp billings in March. Although accelerating to a solid pace, the rate of expansion was weaker than the long-run series average (54.7). Growth in temp billings also quickened across the UK as a whole, and remained faster than that seen in London. Broken down by region, rates of expansion quickened in the North, the Midlands, London and Scotland, but eased slightly in the South.
Candidates available for permanent roles in the capital fell for the forty-sixth successive month during March. The rate of decrease was the most marked since December 2015 and sharper than the UK average. On a regional basis, the steepest drop was evident in London and the slowest, albeit still marked, in Scotland. At the UK level, candidate availability fell at a slightly softer pace, but one that remained sharp.
The supply of temporary staff in London fell in March, thereby continuing a trend that has been evident in each of the last 44 months. The rate of decline accelerated from February and was sharp overall. Recruitment consultancies across the UK also recorded a further decline in temporary labour supply in March. Furthermore, the reduction was widespread across the five regions monitored by the survey. The sharpest decrease was recorded in the Midlands.
Salaries given to permanent starters in London increased in March, thereby continuing a trend that has been observed since June 2013. The rate of growth accelerated from February and was sharp, albeit weaker than the UK average. Each of the five monitored UK regions recorded a marked rise in permanent starting salaries during March. As was the case in February, the strongest increase was evident in the South. At the UK level, the rate of inflation eased marginally from the previous month but remained above the long-run average.
Temp pay increased further during March, thereby extending the latest period of inflation to six months. That said, the rate of pay growth eased to its weakest since last October and was slower than the solid pace seen across the UK as a whole. By region, temp wage inflation was sharpest in Scotland, while it was weakest in London.
"Finding people to do the jobs on offer is rapidly becoming employers' biggest headache and many are reporting an increasing number of white collar jobs as hard to fill, including in the IT and financial sectors,” said REC chief executive Kevin Green. ”Shortages of appropriately skilled, willing and able candidates was a problem before the referendum. Our concern is that Brexit will make the problem worse, particularly if onerous restrictions are imposed on people coming from the EU to work.
"Also, economic uncertainty about future prospects is having a detrimental effect on employees' willingness to risk a career move at this time, which seems to be driving down candidate availability. Our data shows London and the South, where financial services jobs are concentrated, as particularly suffering from low candidate availability for permanent job vacancies.”
Overall the REC believes the shrinking talent pool of available candidates means that businesses are boosting the starting salaries and hourly rates they are prepared to offer to the right candidate. For job hunters willing to move roles at the moment, there are financial rewards on offer - especially it seems in finance, IT and other management and office-based professional roles.