steven jagger kpmg report on jobs in may

UK Labour Market 6th June 2014

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

Report on Jobs

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Availability of permanent candidates falls at sharpest rate since November 1997

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

“Trying to fill vacancies in the current climate must feel like wandering through a hall of mirrors for the UK’s employers. No sooner are they in a position to reflect the improving economy by creating roles and offering tempting salaries, than the search for talent seems to reach a dead end, with candidates either preferring to hide in the shadows or failing to offer the appropriate skills.

“The latest figures also suggest that employees want more from their workplace than better pay and better benefits. Even though starting salaries continue to rise, job seekers are sending out a very clear message that remuneration is not the only reward they are after. With candidate availability at its lowest point for almost 17 years, individuals are saying that prospective employers are going to need to widen their offer to tempt top talent to move. It could mean that we have finally reached a point where employers have to consider reshaping roles, working arrangements and their own expectations or risk being caught out by an endless cycle of unfilled roles and unfulfilled workers struggling to cope with increasing workloads.”

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 May survey:

Permanent placements and temporary billings continue to rise strongly...

...despite sharply falling candidate availability

Further strong rise in permanent salaries, while temp pay growth accelerates

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 May are:

Steepest drop in permanent staff availability for 16½ years...The availability of candidates to fill permanent roles fell further in May. Moreover, the rate of deterioration accelerated to the sharpest since November 1997. Temporary/contract staff availability was also down markedly, with the latest drop only slightly slower than April’s 13-year record.

...contributes to robust pay growthAlthough easing slightly from April’s 81-month high, the rate of growth in permanent salaries remained considerable in May. Temporary/contract staff hourly pay rates meanwhile rose at the fastest pace since December 2007.

Staff placements continue to increase at marked pace...Permanent placements growth remained marked in May, despite moderating slightly since the previous month. Temporary/contract staff billings also rose strongly, with the rate of expansion quickening from April’s ten-month low.

...supported by strongly rising vacanciesOverall demand for staff continued to increase at a marked rate in May, although the pace of growth eased to a five-month low. Permanent vacancies again rose slightly faster than temporary/contract roles.

1 Executive summary

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Demand for staff

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.

Staff placements continued to rise strongly in May, with growth of both permanent and temporary appointments remaining marked.

Further strong rise in permanent placementsMay data pointed to another rise in the number of people placed in permanent roles by recruitment consultancies. The rate of expansion remained substantial, despite easing slightly since April. Around 43% of panellists reported higher placements, versus just under 19% that signalled a fall. Increased client demand and rising confidence among employers were reported to have underpinned the latest expansion of permanent placements. However, some respondents commented that shortages of suitable candidates had restricted placements growth.

The Midlands continued to register the strongest growth of permanent placements in May, while the slowest rise was indicated in London.

Temp billings growth remains marked Agencies’ billings from the employment of temporary/contract staff continued to rise in May. The rate of expansion remained marked, having quickened slightly from April’s ten-month low. Growing business requirements at clients were cited as a factor driving temp billings higher.

Temp billings growth was fastest in the Midlands, followed by the South. London and the North posted similar robust rates 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

2013 Dec 39.1 34.6 26.4 12.7 56.3 64.62014 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

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.

2013 Dec 38.9 43.8 17.3 21.6 60.8 63.12014 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

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.

Growth of demand remains strong, despite easing to five-month lowDemand for staff continued to rise at a considerable rate in May. Although slipping from 67.1 in April, to a five-month low of 66.3, the Report on Jobs Vacancy Index continued to signal a substantial rate of growth.

Permanent vacancies continued to rise faster than temporary roles.

Public & private sector vacanciesPrivate sector demand for staff remained considerably stronger than that in the public sector, according to the latest data.

In both sectors, vacancy growth was faster for permanent employees than temporary staff.

Other vacancy indicatorsData from the Office for National Statistics showed that job vacancies were up 22.7% on an annual basis in the three months to April.

Latest available data signalled that internet-based recruitment spending rose by 10.1% on an annual basis in the fourth quarter of 2013, the fastest growth for two years.

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 Indicators

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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 67.4 66.9 67.2 67.1 66.3Permanent Staff 67.5 67.0 67.3 67.2 66.4Temporary Staff 65.1 64.9 65.8 64.9 64.4

Public: perm 57.3 56.7 56.0 56.0 57.1Public: temp 54.8 56.3 59.7 57.8 55.2Private: perm 72.1 74.9 72.1 72.6 71.4Private: temp 61.2 66.8 69.9 67.6 69.4

Job centre vacancies 18.0 19.7 22.1 22.7 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 StaffAccounting/Financial took over top spot in the demand for staff ‘league table’ in May. Engineering dropped to second place, although continued to register a marked rate of expansion overall. The slowest growth was signalled for Blue Collar workers.

4 Demand for staff by sector


Demand for staff

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Engineering; Construction

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

This year (Last year) Rank May'14 Rank May'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.

Blue Collar 1 67.8 (2) (55.8)Engineering* 2 64.6 (8) (50.0)Secretarial/Clerical 3 64.2 (4) (53.8)Construction* 4 63.3 (9) (49.4)Hotel & Catering 5 63.2 (5) (53.0)Executive/Professional 6 62.9 (7) (52.1)IT & Computing 7 62.9 (3) (55.6)Accounting/Financial 8 61.5 (6) (52.4)Nursing/Medical/Care 9 60.7 (1) (63.7)

Accounting/Financial 1 69.3 (4) (54.7)Engineering* 2 69.0 (8) (50.0)Executive/Professional 3 68.3 (3) (57.1)IT & Computing 4 67.8 (2) (57.9)Nursing/Medical/Care 5 65.3 (1) (58.7)Construction* 6 64.8 (8) (50.0)Secretarial/Clerical 7 64.4 (5) (52.0)Hotel & Catering 8 62.4 (7) (50.3)Blue Collar 9 60.5 (6) (52.0)


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Temporary/contract staffBlue Collar workers were the most in-demand type of temporary staff in the latest survey period. Mirroring the trend for permanent employees, Engineering took second place in the table. Nursing/Medical/Care staff saw the slowest rise in demand for their services.


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 staffPermanent staff availability declined further in May. Moreover, the rate of decline accelerated to the sharpest since November 1997. Approximately 41% of panellists reported lower permanent staff availability, compared with just under 8% that signalled a rise.

The South posted the sharpest fall in permanent staff availability in May, although rates of decline were marked across all four English regions.

Availability of temp/contract staffAlthough easing slightly from April’s multi-year peak, the rate of decline in temporary/contract staff availability remained substantial in May.

Lower temp availability was recorded in each of the four monitored English regions, with the fastest reduction signalled in the Midlands.

5 Staff availability

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2013 Dec 10.1 50.1 39.8 -29.8 35.1 39.62014 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

Key permanent staff skills reported in short supply:* Accountancy/Financial: Accounts, Credit controllers, Finance, Payroll. Blue Collar: Drivers, Manufacturing, Trades. Engineering: Engineers, Rail. Executive/Professional: HR, Marketing, Operations managers, Senior management, Solicitors. Nursing/Medical/Care: RGNs, RMNs. IT/Computing: Business analysts, Cloud, Digital media, eCommerce, Games technology, Java, Senior dev, PHP, Project managers. Secretarial/Clerical: Legal secretaries. Other: Customer service, Languages, Sales, Teachers, Tour operators, Utilities.

Key temp skills reported in short supply:* Accountancy/Financial: Payroll. Blue Collar: Assembly workers, Drivers. Construction: General construction, Plant operators, Surveyors. Engineering: Electronic, Engineers. Executive/Professional: Project managers, Telecommunications. Hotels/Catering: Chefs. IT/Computing: Business intelligence, Developers, .Net, SQL. Nursing/Medical/Care: RGNs, RMNs. Secretarial/Clerical: Reception. Other: Customer service.

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

2013 Dec 16.0 52.8 31.2 -15.2 42.4 43.62014 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

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 salariesAverage starting salaries for people placed in permanent jobs by recruitment consultancies continued to rise in May. The rate of growth remained marked, despite easing slightly from April’s 81-month high. A combination of strong demand and candidate shortages was reported to have underpinned salary increases.

Permanent salary growth was strongest in the South during May, while the North posted the slowest rise.

Temp/contract pay ratesHourly rates of pay for staff in temporary/contract employment rose again in May, with the rate of growth accelerating to the sharpest since December 2007.

Each of the four English regions saw increases in temp pay, with the Midlands recording the sharpest rise.

6 Pay pressures

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2013 Nov 22.3 74.3 3.4 19.0 59.5 59.7 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

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 Nov 15.3 82.2 2.4 12.9 56.4 55.6 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

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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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Annual percent change

Yr/yr % chg in average weekly earnings (3mma)

2011 2012 2013 Dec'13 Jan'14 Feb MarWhole economy 2.4 1.4 1.2 1.2 1.4 1.7 1.7Private sector 2.5 1.5 1.5 1.5 1.6 2.0 1.8Public sector 2.5 1.3 0.9 0.3 0.5 0.9 0.7Services 2.8 1.4 1.1 1.0 1.1 1.5 1.5Manufacturing 1.6 1.8 2.2 2.6 3.2 3.2 2.9Construction 0.9 0.9 0.0 1.0 2.9 3.2 2.9

UK average weekly earningsData from the Office for National Statistics signalled that annual growth of employee earnings (including bonuses) held steady at 1.7% in the three months to March. Private sector pay growth remained stronger than that in the public sector.


Report on Jobs | Recruitment Industry Survey

7 Feature International comparisons

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.

UK unemployment rate in context

The UK unemployment rate dropped to 6.8% in the first quarter of 2014, according to the latest figures from the Office for National Statistics.

This compares favourably with the EU average of 10.5%. Spain continues to register by far the highest unemployment rate, at 25.3%.

Unemployment rates in Italy and France remain in double-digits, at 12.7% and 10.4% respectively. The jobless rate in the Netherlands stands at 7.2%.

Japan (3.6%), Austria (4.9%), Germany (5.1%) and the United States (6.3%) all have lower unemployment rates than the UK at present.


Sources: ONS, Eurostat, Bureau of Labor Statistics.

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steven jagger kpmg report on jobs in may

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