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The Recruitment & Employment Confederation (REC) survey and HIS Markit’s Report on Jobs have released figures suggesting that the number of permanent staff placements - and starting salaries - increased at the fastest pace in four months, at the end of 2017. 

They also reported that the growth of temporary placements was high with a marked decline in staff availability - the sharpest decrease reported in the last two years - contributing to steep increases in pay. Overall demand for staff remained sharp, firmly above the average seen over the 20-year survey history.

The REC/HIS Markit’s Report on Jobs provides the most comprehensive guide to the UK labour market, using original survey data provided by a panel of 400 UK recruitment consultancies.  

Figures released by Totaljobs on their website also reflected the recruitment boom, suggesting that there had been an increase of 20% in the number of jobs advertised in the first week of 2018 compared to the same period in 2016.

On a regional basis, the Midlands continued to show the fastest increase in permanent placements at the end of the year and the least rate of growth was seen in London - but London registered the fastest increase in temp billings of all five monitored UK regions in December. Expansion was also sharp elsewhere.

December data pointed to rising demand for staff, both in the private and public sector, although growth remained sharper for the private sector.

This information, however, contrasts with the official statistics from the Office for National Statistics (ONS) which revealed that there had been a 2% overall fall in employment, together with 0.2% fall in real weekly earnings, including bonuses.

Charles Cotton – reward adviser at the CIPD – stated:

“The REC survey is focusing specifically on recruitment and individuals being placed in organisations but is not necessarily looking at those who are leaving or being made redundant. The broader picture, including labour market issues, must be taken into consideration to reach a balanced view of what is really happening in the recruitment market.”

REC chief executive Kevin Green said:

“Employers, as a response to these candidate shortages, are offering increased starting salaries to attract staff – but while this has been the case for some time, it isn’t translating into significant wage growth across the economy yet,”

Charles Cotton warned that increases in starting salary may not be good for employees in the longer term:

“Organisations are increasing starting salaries to get people through the door but, once they are in there, then this does not improve particularly fast, and if they have been appointed to the top of their pay range they may not see much of a pay rise at all.”  

He added:

“That is an issue we called out last month in the CIPD’s latest reward management survey, which could throw up a number of employee relations issues in the longer term. Employers should always seek to confirm how long and enduring the recruitment surge will be before taking people on to permanent contracts.”

“Whether taking on new staff permanently or shifting existing employees from temporary to permanent contracts, it’s important to be creative and consider your working culture, what people are being paid, and non-financial benefits that could put you ahead in terms of recruitment, as well as ensuring you don’t undersell or oversell for the job you advertise.”

Kevin Green, REC Chief Executive says:

“Early in the New Year, people often think about changing jobs, so employers are going to have to think carefully about how they can both retain existing capabilities and find the new hires they need as competition for people intensifies. Bosses should consider going to wider talent pools and to be inventive about how to improve their employer brand and make themselves an even more attractive place to work.”