UK economy spurs marked increase in permanent recruitment

A further easing of Covid-19 restrictions and the reopening of more sectors of the UK economy spurred a marked increase in hiring activity in May, according to the latest Report on Jobs by the Recruitment and Employment Confederation and KPMG.

Recruitment consultants across the UK signalled a further rise in permanent staff appointments in May, thereby extending the current sequence of expansion to three months. Furthermore, the rate of growth accelerated to a survey-record high, exceeding the previous peak in October 1997.

The report cited the further easing of national lockdown measures, which more recently included the reopening of hospitality and leisure sectors, and greater market confidence, as having driven permanent placements higher in May.

The North of England saw the steepest increase in permanent staff appointments of all four monitored English regions, though rates of growth were also sharp elsewhere.

At the same time, temporary billings growth saw its highest upturn since February 2015. Recruiters pointed to the easing of pandemic-related restrictions and firmer demand for temp staff across a variety of sectors.

The sharpest rise in temp billings was seen in the North of England, followed by the South of England. Meanwhile, the Midlands recorded a relatively modest rate of growth, while billings were broadly stagnant in London.

When it comes to job vacancies, the report highlighted a sharp and accelerated rise, with the latest upturn the most marked since January 1998. Substantial increases in demand were signalled for both permanent and temporary staff, with the former seeing the slightly steeper rate of growth.

Demand for permanent workers rose across all ten monitored job categories during May.

For temporary workers, the blue-collar category saw the sharpest increase in demand for temp workers, though marked increases were also seen across the other nine monitored job categories.

Kate Shoesmith, Deputy CEO of the REC, said, “We now have a consistent picture over the past few months to show that confidence is growing and hiring plans are in motion. The data is mirroring exactly what recruiters tell us daily. Permanent placements are growing at the fastest pace we’ve ever seen, and temp billings at the quickest for six years.”

Meanwhile, the supply of workers across the UK fell for the third month running in May. Furthermore, the rate of deterioration was the steepest recorded for four years and rapid. The data indicated that both permanent and temporary staff availability declined at sharper rates, with the former noting the faster rate of contraction.

Lower worker availability was frequently linked to lingering pandemic uncertainty and a subsequent reluctance to seek out new roles, fewer EU candidates and furloughed staff.

Average starting salaries for people placed in permanent jobs increased further in May. The rate of growth was the quickest since September 2018.

Source: Staffing Industry Analysts