The KPMG/Recruitment and Employment Confederation (REC) report found the fall in candidate availability - some of it caused by people staying in existing positions because of jitters over Brexit - had led to further increases in starting pay.

Recruitment: need for pragmatism about immigration

Neil Carberry, REC chief executive, said shortages in many sectors "again emphasises the need for pragmatism on immigration and a clear post-Brexit transition period".Compiled by IHS Markit from responses by 400 UK recruitment and employment consultancies, the report showed that, during January, workers taking permanent roles declined for the first time since mid-2016. And while demand for new staff remained strong, the growth recorded last month was at its lowest level in more than two years.The largest increase in permanent staff demand was seen in the accounting/financial sector, followed by engineering and IT/computing. The only sector to register lower permanent job vacancies was retail. Hotel and catering topped the league table for demand for temporary staff in January, closely followed by nursing/medical care. Vacancies also rose across all other job sectors, with the weakest expansion seen in retail.

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Read the Crown World Mobility report to find out what Europe feels about Brexit

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“This is the first month since July 2016 where permanent placement numbers have dropped, with weaker – but still positive – performance for temporary roles, and the lowest rate of vacancy growth for over two years," said Mr Carberry."But we should be careful not to overreact – employment rates are high, and the performance of our labour market overall is still strong. We also know that key sectors such as accounting, engineering and IT are facing shortages. “That said, the survey results are a sharp reminder to politicians in Westminster and in Brussels of the need to provide businesses with clarity about the path ahead, so they can invest with confidence."

KPMG: Brexit is "a nervous time for recruiters"

James Stewart, KPMG vice-chairman, commented: “With Brexit just days away now, it’s definitely a nervous time for recruiters. January marked the first fall in permanent staff appointments since the referendum and we’ve seen a sharp decline in the number of candidates entering the jobs market.  This is pushing up starting salaries at historically strong rates.  “Both employers and employees are in ‘wait and see' mode now and there is little reason to believe the brakes will come off the jobs market before we find out what sort of Brexit the UK is about to experience.  “The majority of sectors across the UK economy are now more cautious, and hiring more slowly than they were 12 months ago. Indeed, the retail sector is actually shedding permanent staff.  “Nationally the number of permanent staff appointments has fallen considerably in the North region, Midlands region and London. The exception is the Southern region where the number of permanent staff appointments continues to grow, albeit more slowly.”Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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