The Report on Jobs from the Recruitment and Employment Confederation and KPMG has recorded temp billings at a 15-year high. Looking over August the survey concludes the employment of temporary/contract staff increased strongly in August, with the rate of expansion picking up to the fastest since July 1998. Higher temp billings were supported by the sharpest rise in demand for short-term workers since December 2000.
“August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15 year high,” says REC’s Chief Executive Kevin Green. “Our temporary worker index is the highest we have seen since 1998, the same summer Google was founded and France won the World Cup for the first time. There is more good news for all workers with pay rates for temps rising for the seventh consecutive month and starting salaries for permanent staff increasing at the highest rate in five and a half years.”
Permanent placements are also rising strongly although growth eased from July’s 40-month high. Underpinning the rise was the fastest increase in available permanent vacancies since June 2007. The rate of increase for permanent staff salaries also rose in August, reaching its fastest pace in five-and-a-half years. Temp pay rates also continued to rise, although the pace of inflation was slightly slower than the five-and-a-half year high seen in July.
“Vacancy growth has hit a six year high and fluidity is returning to the jobs market, so over the coming months we expect to see a noticeable improvement in official employment figures,” adds Green. “The major issue now is the worrying lack of candidates to fill the jobs being advertised. In August, the number of vacancies increased at the sharpest rate in over six years but the availability of staff keeps declining.”
“With retail sales up and the OECD sharply increasing its growth forecast for the UK economy, it’s no surprise to see that confidence amongst employers is gaining momentum,” notes Bernard Brown, Partner and Head of Business Services at KPMG. “Demand for staff has increased at its sharpest rate for over six years and whilst the thirst for permanent employees remains strong, the real success story revolves around the ‘return to work’ prospects offered by the surge in temporary and short-term placements.
“With these roles seeing their fastest rise for 15 years, it means opportunities to get back into the labour market for people with other commitments are becoming more of a reality than a wish,” he continues. “If we continue on this trajectory, it could also mean that Mark Carney will have to consider raising interest rates sooner than first thought.”
Mr Brown concludes: “In the current marketplace, organisations seem increasingly willing to pay more for top talent, with the latest figures showing the rate of starting salaries accelerating to a five and half year high. Increasing the pounds in candidates pockets may sound like good news; it is – but employers must make sure they are paying the right price for the right person and not simply racing to fill a vacancy.”