Demand for staff continues to increase with a rise both in permanent staff placements and salaries, according to the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs.
The report indicated a rise in permanent staff placements for the fourth month running during January. Temporary billings also increased for the sixth month in succession, with the pace of expansion quickening slightly in the latest survey period.
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The report says demand for staff continued to increase at the start of 2013. The rate of growth in permanent vacancies quickened to a 21-month high, but temp vacancies rose at a slightly slower pace than in December.
Average starting salaries for people placed in permanent jobs continued to increase in January. Although still moderate, the rate of inflation was at a 16-month high. Contributing to the rise in salaries was a deterioration in the availability of permanent staff, albeit only slight, says the report.
However, hourly rates of pay for staff in temporary/contract employment decreased for the first time in five months during January, although only fractionally. Short-term staff availability meanwhile rose moderately.
The North saw the fastest growth of permanent placements in January, followed by the Midlands. London and the South posted modest increases.
Private sector demand for permanent employees rose at a strong rate in January, with growth picking up to a ten-month high. However, private sector demand for temporary staff dipped slightly for the first time in a year, says the report.
In the public sector, demand fell for both permanent and temporary staff in January, with the former recording the sharper decline.
Engineering/Construction and IT & Computing were the most in-demand categories of permanent staff during January. A strong rate of expansion was also signalled for staff in the Nursing/Medical/Care sector. The weakest growth was recorded for Hotel & Catering workers.
Nursing/Medical/Care was the most sought-after type of short-term staff during the latest survey period. Engineering/ Construction and Accounting/Financial workers also saw robust improvements in demand for their services, says the report. The only category where a fall was signalled was Executive/Professional, but this was only slight.
REC director of policy and professional services Tom Hadley said: “The war for talent has begun. January saw the sharpest rise in starting salaries in well over a year after a nine-month trend of increases. The rise is caused by continued growth in permanent vacancies paired with a reduction in candidate availability. This is good news for workers but also highlights the need to address the current ‘skills disconnect’ which presents a major barrier to growth in key sectors of our economy.
“Skills shortages in whole sectors like engineering and IT and for particular roles like chefs, drivers and sales is spurring competition for qualified staff. Employers are realising that to secure the talent they need they have to offer more attractive salaries.”
Bernard Brown, Partner and Head of Business Services at KPMG, added: “Amid the doom and gloom caused by predictions of slow growth, the hiring figures for January should give employers and employees plenty of reasons to be cheerful.
“Demand for staff is at its highest peak for almost two years meaning that employees who may have been too nervous to change jobs in recent months, might consider the benefits of a fresh challenge. Given the skills gaps that continue to plague many sectors, increased availability of qualified and experienced staff could help fill the capability gap many employers have wanted to plug for some time.
“Staff may also have more room for manoeuvre, as the data indicates starting salaries rose again in January, seeing their sharpest climb since September. We are by no means at a stage where the candidate is king, but perhaps they are moving closer to the throne.
“It’s also clear that private sector permanent positions are coming to the fore, with growth at a 10-month high. The hope must be that this is a trend that continues. If it does, predictions of further doom and gloom may yet prove to be extreme.”