Growth in permanent staff placements slowed to its weakest for seven months during April, while temp placements increased at a sharp rate, according to the Recruitment & Employment Confederation.
A large part of the problem is a skills shortage, with REC noting a sharp fall in the availability of permanent and temporary candidates. Both temp and permanent placements saw the steepest deterioration in candidate availability for 16 months and job vacancies continued to rise significantly.
However, although growth in permanent starting salaries subsided to a four-month low in April, it remained stable overall. Meanwhile, hourly pay rates for short-term staff increased at the sharpest pace in 2017 so far.
London saw the slowest increase in permanent placements while the Midlands saw the fastest. Demand for staff was up across the private sector, but declining in the public sector.
Sectors were there was strong demand for permanent staff included Engineering, IT & Computing and Nursing/Medical/Care.
REC Chief Executive Kevin Green says: “Demand for staff is growing within all sectors and all regions of the UK, but there are fewer and fewer people available to fill the vacancies. We have the lowest unemployment rate since 2005, and people already in work are becoming more hesitant about moving jobs amid Brexit uncertainty. Meanwhile, the weakening pound and lack of clarity about future immigration rules is putting off some EU nationals from taking up roles in the UK.
“As a result, candidate availability is at a 16-month low and recruiters are flagging a shortage of suitable applicants for more than 60 different roles from cleaner to accountant. Every shortage has wider implications, for example, the exceptional reputation UK engineering enjoys globally is at risk because employers can’t find people with the skills they need.
“One thing is for certain, if British business is to thrive then whichever party forms a government after 8 June needs to address the ever-shrinking pool of suitable candidates by investing in skills and career advice for UK jobseekers, as well as safeguarding access to the workers we need from abroad. It is vital that the future immigration system is agile enough to reflect and adapt to evolving labour market needs.”