steven jagger - june report on jobs

UK Labour Market 8th July 2014

The most up-to-date source of monthly UK labour market data and analysis

Report on Jobs

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Record rise in starting salaries as permanent candidate availability plummets

Commenting on the latest survey results, Bernard Brown, Partner and Head of Business Services at KPMG, said:

“Once again employers seem ready to ‘splash the cash’ in what appears to be a desperate attempt to lure skilled staff from competitors. Yet despite offering starting salaries at a rate that has not been seen during the survey’s 17 year lifetime, it is clear that candidates are not easily swayed. As consumers they may be facing rising house prices and struggling to build financial reserves because of low interest rates, but the desire for extra disposable income is not yet translating into a generation of employees who are only loyal to their monthly pay cheque.

“It’s a message employers would do well to take to heart as, although many might argue that by offering higher pay packets, they are showing market confidence, the truth is that continued starting salary growth is unrealistic and unsustainable over the long term. Ultimately candidates are also suggesting this by voting with their feet, because we have also just witnessed the biggest fall in candidate availability for 17 years. Perhaps this means that the productivity gap is being replaced with another chasm – a vacancy vacuum – and one that is unlikely to be resolved until employers recognise that, for staff, remuneration is about much more than take home pay.”

Markit

Henley on ThamesOxon RG9 1HG, UK Tel: +44 1491 461000Fax: +44 1491 461001email: [email protected]

Copies of the report are available on annual subscription from Markit. For subscription details please contact:[email protected]

The Report on Jobs is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation and KPMG LLP.

The report features original survey data which provide the most up-to-date monthly picture of recruitment, employment, staff availability and employee earnings trends available.

1 Executive summary

2 Appointments

3 Vacancies

4 Sectoral demand

5 Staff availability

6 Pay pressures

7 Special feature

Key points from the June survey:

Permanent and temporary staff availability both tumble

Demand for staff and placements both continue to rise sharply

Series record increase in average starting salaries recorded

Report on Jobs | Recruitment Industry Survey Report on Jobs | Recruitment Industry Survey

The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. The main findings for June are:

Record fall in permanent staff availability in June...The latest survey of UK recruitment consultancies indicated a considerable reduction in the availability of staff to fill permanent roles. The rate of contraction accelerated to the sharpest seen in the survey history, which began in October 1997. Temporary/contract staff also recorded a sharp deterioration in availability, with June’s drop the greatest seen since March 1998.

...helps drive starting salaries up at series record pace...Amid reports of a short supply of suitable candidates, and with demand for staff increasing, permanent salaries rose during June at a survey record rate. Salaries have now risen for twenty-six months in succession.

Moreover, temporary/contract staff hourly pay rates rose at the sharpest rate since November 2007.

...as demand for staff continues to grow...Latest vacancy data indicated faster increases in the demand for both permanent and temporary staff during June. Growth was led the private sector, with demand here continuing to rise at a rate that comfortably outstripped those seen in the public sector.

...and placements rise As companies sought to efficiently fill vacancies, permanent placements continued to increase during June. Although remaining sharp by historical standards, the rate of growth was the lowest seen since last November.

Temporary/contract staff billings in contrast increased at the sharpest pace for five months.

1 Executive summary

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All Intellectual Property Rights owned by Markit Economics Limited


Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.

June’s survey data showed the continuation of strong growth in permanent placements and temporary staff billings, with the latter recording the sharper rate of increase.

Further strong rise in permanent placementsA sharp increase in permanent placements was again signalled in June, with just under half of the survey panel recording growth. There were reports amongst recruitment consultancies that strong growth was again reflective of high demand for staff and increased confidence amongst companies which was leading to a buoyant labour market.

Permanent staff placements have now risen for 21 months in a row, although the latest rate of growth was the lowest seen since last November.

Of the four broad English regions for which data are available, the sharpest increase in permanent placements was seen in the Midlands, closely followed by the South. London remained a relative laggard, although even here growth was historically strong.

Growth of temp billings hits five-month high Recruitment agencies registered their strongest net increase in temp billings for five months in June, thereby also extending the current sequence of growth to 14 months. There were reports of increased demand across all sectors as clients signalled higher business requirements.

Leading the way in terms of temp billings growth was the Midlands followed by the South. The North saw a stronger increase in temp billings, but London recorded a slower rate of expansion. An index reading above 50 signals a higher number of placements/billings than the previous month. Readings below 50 signal a decline compared with the previous month.

2 Staff appointments

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Staff Appointments via Recruitment Consultancies

2014 Jan 49.8 30.3 19.9 29.8 64.9 62.1 Feb 49.8 33.7 16.5 33.2 66.6 65.2 Mar 49.7 32.7 17.6 32.1 66.0 62.6 Apr 50.1 31.3 18.6 31.4 65.7 63.8 May 43.4 38.0 18.6 24.9 62.4 62.8 Jun 49.0 30.9 20.1 28.9 64.4 61.3

Higher Same Lower Net Index S.Adj. % % % +/- 50=nochg Index

Permanent Staff PlacementsQ. Please compare the number of staff placed in permanent positions with the number one month ago.

2014 Jan 25.1 45.1 29.8 -4.7 47.6 62.8 Feb 42.2 37.8 20.0 22.2 61.1 61.7 Mar 40.8 46.6 12.6 28.2 64.1 59.9 Apr 37.8 41.9 20.3 17.4 58.7 58.9 May 39.2 43.2 17.6 21.6 60.8 59.1 Jun 48.1 38.4 13.5 34.6 67.3 62.2

Higher Same Lower Net Index S.Adj. % % % +/- 50=nochg Index

Temporary/Contract Staff BillingsQ. Please compare your billings received from the employment of temporary and contract staff with the situation one month ago.


3 Vacancies


Recruitment consultants are asked to specify whether the demand for staff from employers has changed on the previous month, thereby providing an indicator of the number of job vacancies. The summary indexes shown in this page are derived from the detailed sector data shown on page 5.

Faster increases in demand for permanent and temporary staffThe Report on Jobs Vacancy Index remained well above the 50.0 no-change mark in June to signal another marked increase in the demand for staff. Posting 66.5, the index improved on May’s five-month low and again signalled a sharp rate of growth.

Latest data showed demand for permanent staff continued to rise at a sharper pace than for temporary workers.

Public & private sector vacanciesJune’s survey results again showed that demand for staff continued to increase at a considerably quicker rate from the private sector for both permanent and temporary workers.

In both the public and private sectors, demand for temporary workers rose at rates that outstripped those seen for permanent staff.

Other vacancy indicatorsLatest official data from the Office for National Statistics (ONS) indicated continued strong growth of job vacancies in April, with a year-on-year rise of 22.3% recorded.

Meanwhile, internet-based recruitment spending continued to increase at a strong annual pace. Latest data showed a 10.1% rise during Q4 2013.

The Job Vacancies Index monitors the overall demand for staff at recruitment consultancies. An index reading above 50 signals a higher number of vacancies than the previous month. Readings below 50 signal a decline compared with the previous month.

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Job Vacancy Index (recruitment industry survey) 50 = no change on previous month

Other key vacancy dataAnnual % change

Sources: Job centre vacancies provided by Office for National Statistics Internet recruitment spending provided by WARC.com

Total 67.0 66.9 66.8 65.8 66.5Permanent Staff 67.1 67.0 66.9 65.9 66.6Temporary Staff 64.8 65.7 64.9 64.4 65.7

Public: perm 56.7 56.0 56.0 57.1 53.6Public: temp 56.3 59.7 57.8 55.2 57.6Private: perm 74.9 72.1 72.6 71.4 73.0Private: temp 66.8 69.9 67.6 69.4 74.0

Job centre vacancies 22.5 22.9 22.3 n/a n/a Internet recruitment 10.1 -- -- -- --

Public & private sector vacancies (not seasonally adjusted)


Recruitment consultancies are requested to compare the demand for staff according to sector with the situation one month ago.

Permanent StaffEngineering was the best performing sector in the demand for staff ‘league table’ during June. Construction also continued its recent strong performance, recording a considerable rate of growth. Hotel & Catering was the weakest performer.

4 Demand for staff by sector


Demand for staff

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Engineering; Construction

This year (Last year) Rank Jun'14 Rank Jun'13

This year (Last year) Rank Jun'14 Rank Jun'13

*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.

Data are presented in the form of diffusion indices whereby a reading of 50 indicates no change on the previous month. Readings above 50 signal stronger demand than a month ago. Readings below 50 signal weaker demand than a month ago.

Engineering* 1 69.7 (2) (60.7)Blue Collar 2 69.1 (5) (56.6)Construction* 3 67.0 (3) (58.1)Secretarial/Clerical 4 64.3 (6) (56.3)IT & Computing 5 63.8 (4) (57.6)Accounting/Financial 6 63.0 (9) (53.7)Nursing/Medical/Care 7 62.9 (1) (65.3)Hotel & Catering 8 62.7 (7) (55.2)Executive/Professional 9 62.0 (8) (54.1)

Engineering* 1 74.3 (4) (60.7)Construction* 2 72.7 (4) (60.7)Accounting/Financial 3 68.0 (6) (58.3)IT & Computing 4 66.9 (1) (61.7)Executive/Professional 5 66.6 (3) (61.0)Secretarial/Clerical 6 64.4 (7) (56.0)Nursing/Medical/Care 7 63.2 (2) (61.1)Blue Collar 8 62.4 (8) (53.9)Hotel & Catering 9 60.4 (9) (53.4)


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Temporary/contract staffEngineering workers were also the most in-demand type of temporary staff during June, followed by Blue Collar and then Construction. Demand for temporary staff is rising at stronger rates across all categories when compared to 12 months ago, with the exception of Nursing/Medical/Care.


Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month. An overall indicator of staff availability is also calculated.

Availability of permanent staffIn line with a rapidly tightening UK labour market, the availability of permanent staff continued to decline in June. Moreover, the rate of contraction accelerated for a fifth successive month to a new series record (data have been collected since October 1997).

Nearly half of the survey panel indicated a fall in candidate availability during June and it was in the South of England where the sharpest reduction was registered, followed by the Midlands, the North and then London.

Availability of temp/contract staffHaving eased slightly during May, the latest data indicated a sharp acceleration in the rate of contraction in temporary/contract staff. With 38% of the survey panel recording a fall, the net decline was the sharpest since March 1998.

In line with recent trends, temp availability fell across all four English regions. The Midlands and London recorded the sharpest reductions.

5 Staff availability

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2014 Jan 27.3 42.2 30.5 -3.2 48.4 41.1 Feb 16.8 49.4 33.8 -17.0 41.5 39.0 Mar 13.8 47.9 38.3 -24.5 37.8 38.0 Apr 12.2 50.1 37.7 -25.5 37.2 37.6 May 7.8 51.6 40.5 -32.7 33.6 34.9 Jun 4.9 45.2 49.9 -45.0 27.5 28.9

Key permanent staff skills reported in short supply:* Accountancy/Financial: Accountants. Blue Collar: HGV Drivers. Engineering: Qualified Engineers, Project Managers. Executive/Professional: Client Relationship Managers, Logistics Professionals, Field Sales. Hotels/Catering: F&B Managers, Chefs. Nursing/Medical/Care: Care Workers, Home Carers, Nurses. IT/Computing: CAD Designer, eCommerce, .net, JAVA, SQL, Net Developers, IT Developers. Secretarial/Clerical: HR. Other: Estimators, Supervisors, Telesales Professionals, Business Developers.

Key temp skills reported in short supply:* Accountancy/Financial: Payroll. Blue Collar: FLT Drivers, LGV Drivers Engineering: Fabricator Welders, Plater Welders, Qualified Engineers. Hotels/Catering: Chefs. IT/Computing: Developers, eCommerce, JAVA, SQL. Nursing/Medical/Care: Health Care Assistants, Home Care Workers, Nurses. Secretarial/Clerical: Repographics Operators, Legal Secretaries, Receptionists. Other: Tele Marketers, Experienced Sales Personnel, Marketing, Business Developers.

Availability of permanent staffQ. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?

Better Same Worse Net Index S.Adj. % % % +/- Index

2014 Jan 24.6 53.2 22.3 2.3 51.1 44.6 Feb 17.6 57.1 25.3 -7.7 46.1 43.6 Mar 10.6 60.2 29.1 -18.5 40.8 41.7 Apr 10.3 56.6 33.2 -22.9 38.6 39.8 May 9.8 57.6 32.6 -22.8 38.6 40.1 Jun 10.5 51.9 37.6 -27.2 36.4 36.6

Availability of temporary/contract staff

Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?

Better Same Worse Net Index S.Adj. % % % +/- Index


*consultants are invited to specify any areas in which they have encountered skill shortages during the latest month


The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.

Permanent salariesA survey record increase in average starting salaries for workers placed into permanent jobs by recruitment agencies was signalled by the June survey data. Strong demand for candidates, which also tended to be in short supply, alongside competitive pressures underpinned June’s increase, which was the twenty-sixth in successive months.

Strong increases in salaries were recorded across all English regions, with the Midlands and London leading the way.

Temp/contract pay ratesJune data marked a seventeenth successive monthly increase in the hourly rates of pay for temporary/contract staff. Moreover, the pace of increase was the sharpest recorded by the survey since November 2007. Around 22% of the survey panel registered a rise in pay rates, generally citing a strengthening marketplace.

All four English regions recorded rises in temp pay, with the Midlands again recording the sharpest increase.

6 Pay pressures

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2013 Dec 21.7 75.8 2.5 19.2 59.6 60.62014 Jan 23.8 70.3 5.8 18.0 59.0 60.5 Feb 25.5 71.7 2.8 22.7 61.4 61.7 Mar 29.0 67.4 3.6 25.3 62.7 62.2 Apr 32.1 65.8 2.1 30.1 65.0 64.7 May 33.3 62.4 4.3 29.0 64.5 63.9 Jun 38.3 58.2 3.5 34.8 67.4 66.2

Higher Same Lower Net Index S.Adj. % % % +/- Index

Permanent SalariesQ. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?

2013 Dec 9.0 88.1 2.9 6.2 53.1 54.72014 Jan 14.9 81.6 3.5 11.4 55.7 55.0 Feb 15.4 82.1 2.5 13.0 56.5 56.7 Mar 12.9 83.9 3.2 9.7 54.8 54.6 Apr 13.3 85.4 1.3 12.0 56.0 56.5 May 18.6 76.9 4.5 14.2 57.1 57.2 Jun 22.4 74.1 3.5 18.8 59.4 59.7

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Temporary/Contract Pay RatesQ. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?

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2011 2012 2013 Jan'14 Feb Mar AprWhole economy 2.4 1.4 1.2 1.4 1.7 1.9 0.7Private sector 2.5 1.5 1.4 1.6 2.0 2.0 0.6Public sector 2.5 1.3 1.0 0.5 0.9 1.1 1.0Services 2.8 1.4 1.1 1.1 1.5 1.7 0.7Manufacturing 1.6 1.8 2.2 3.2 3.2 3.1 2.0Construction 0.9 0.9 0.0 2.9 3.2 3.1 -0.5

UK average weekly earningsData from the Office for National Statistics signalled that annual growth of employee earnings (including bonuses) dropped to just 0.7% during the three months to April. The slowdown emanated mainly from the private sector, where earnings rose just 0.6%.


Report on Jobs | Recruitment Industry Survey

7 Feature Record rise in employment

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from22officesacrosstheUKwithover12,000partnersandstaff. TheUKfirm recordeda turnoverof£1.8billionin the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. Weoperate in 156 countries and have 152,000 professionals working in member firms around theworld. The independentmember firms oftheKPMGnetworkareaffiliatedwithKPMGInternationalCooperative(“KPMG International”), a Swiss entity. KPMG International provides no client services. The REC is the professional body representing the UK’s £24.6 billion private recruitment and staffingindustrywithmorethan8,000recruitmentagencies and 6,000 recruitment consultants in membership. There are over 1 million temporary workers registered with UK agencies who are deployed in industry, commerce and the public services every day.

is a leading global diversified provider of financial information services. We provideproducts that enhance transparency, reduce risk and improve operational efficiency.Ourcustomersincludebanks,hedgefunds,assetmanagers,central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ over 3,000 people in 11 countries. For more information, please see www.markit.com.

Recruitment Industry SurveyThe monthly survey features original research data collected via questionnaire by Markit from a panel of 400 UK recruitment and employment consultancies. In 2010/11, some 1,049,333 people were employed in either temporary or contract work through consultancies and 604,193 people were placed in permanent positions through consultancies. Monthly survey data were first collected in October1997 and are collected in the end of each month, with respondents asked to specify the direction of change in a number of survey variables. Markitdonotreviseunderlyingsurveydataafterfirstpublication,butseasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.

The intellectual property rights to these data are owned by or licensed to Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of Markit Economics Limited’s intellectual property rights. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.

Strong employment growth pushes jobless rate down to 6.6%

UK unemployment continues to fall sharply amid yet another bout of record hiring, bringing the jobless total to its lowest since the start of 2009.

The latest figures from the Office for National Statistics showed that the rate of unemployment fell from 7.2% in the three months to January to 6.6% in the February to April period, its lowest since January 2009.

The number of people claiming unemployment benefit also decreased in May, down by 27,400 to the lowest since October 2008.

The number of people in employment meanwhile shot up by 345,000 in the three months to April, the largest jump seen since data were first available in 1971.

Contrasting with prior months, the latest rise was driven by companies taking on staff, rather than an increase in self-employment.


Source: ONS.

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steven jagger - june report on jobs

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