REC data suggests further tightening of UK labour market

Echoing official ONS data showing record numbers of people in employment, as well as employer concerns of the impact of Brexit on skills availability, the professional body for recruitment businesses' monthly index showed availability of permanent and temporary candidates declined at sharper rates in April, with permanent candidate numbers posting the quickest pace of reduction.Both categories saw the steepest deteriorations in candidate availability for 16 months.   

Pay and the regions picking up?

Average starting salaries for people placed into permanent jobs also increased at the quickest rate in three months during May. Hourly rates of pay for temporary/contract staff also rose sharply, although the rate of growth has softened since April.All monitored UK regions registered growth in permanent placements in May, led by the South of England and London.The Midlands recorded the fastest increase in temp billings in May, followed by the North. The slowest rate of expansion was reported in the South of England.

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Demand high across all sectors

Demand for staff across the private sector remained robust in May, softening slightly since April for permanent roles. In contrast, the number of temporary vacancies in the private sector rose at a slightly quicker pace than seen in April.For the public sector, May data also indicated greater demand for permanent and short-term staff. The increase in demand for temporary staff was the strongest since July 2015. The number of permanent job vacancies increased for the first time in three months and at a solid pace.The REC's latest figures further indicated that demand for permanent staff had increased across all monitored jobs categories in May.Engineering held its top place in the REC's league table, followed closely by nursing/medical/care. The slowest, yet still sharp, increase in demand was seen in construction, suggested the data.

'Stark challenges' for next government

Nursing/medical/care employees were the most in-demand type of short-term staff in May. In a separate study, union GMB, which represents public sector workers, warned of the impact of Brexit-initiated skills shortages on the NHS.Commenting on the latest figures, Tom Hadley, REC director of policy, said:“The challenges facing the next government are stark. Demand for staff is the strongest in almost two years, but the number of people available to take those jobs has plummeted. Official data shows unemployment has dropped to the lowest level since 1975, and EU citizens are leaving the UK in droves. Employers seeking to fill vacancies are running out of options.“Skill shortages are causing headaches in many sectors. The NHS for example is becoming increasingly reliant on short-term cover to fill gaps in hospital rotas because there aren’t enough nurses to take permanent roles."Meanwhile, the shortage of people with cyber security skills is a particular concern in many businesses in the wake of the recent high-profile WannaCry attacks.“Whichever party forms the next government must focus on improving the employability of our young people and boosting inclusion for underrepresented groupsboosting inclusion for underrepresented groups."Alongside this, these figures clearly show that in many sectors we need more, not fewer people so that businesses can grow and public services continue to deliver.”     

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