Recruitment activity continued to rise sharply in December, survey finds

Recruitment consultancies across the UK continued to signal tight labour market conditions at the end of 2021, according to the latest KPMG and

REC, UK Report on Jobs survey.

Permanent staff appointments and temp billings continued to rise at historically sharp rates, despite the upturns remaining weaker than the peaks seen during the summer.

Vacancy growth softened slightly again, easing to an eight-month low, though overall demand for staff remained robust.

At the same time, there were signs that candidate availability was moving in the right direction, with the latest drop in staff supply the least severe in eight months.

Nonetheless, competition for scarce workers pushed up rates of starting pay for both permanent and temporary staff again, with the respective rates of inflation among the quickest on record.

The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Recruitment consultancies registered further substantial increases in both permanent placements and temp billings at the end of 2021 amid reports of robust demand for staff and greater client requirements.

Permanent placement growth continued to outpace the upturn seen for temp billings.

The supply of overall candidates continued to fall sharply during

December, but the rate of deterioration eased for the fourth month running.

Notably, the latest drop in candidate supply was the least severe since April. Nonetheless, recruiters noted that uncertainty around the pandemic and the economic outlook, a generally low unemployment rate and fewer foreign workers had weighed on candidate numbers.

Starting salaries for permanent workers and temp hourly pay continued to rise rapidly in December, with the respective rates of inflation holding close to record-highs.

Panellists frequently mentioned that starting salaries and wages had risen as demand for staff continued to outstrip supply.

Permanent staff appointments increased across all four monitored English regions in December, with the North of England registering the fastest upturn.

Regional data highlighted that the upturn in temp billings was broadbased across all four monitored English regions.

The quickest expansion was seen in London, while the softest was in the Midlands.

Vacancies continued to increase at a stronger pace in the private sector than in the public sector in December.

The fastest growth rate was signalled for private sector permanent roles, while the softest rise was indicated for public sector temporary jobs.

IT and computing was the most indemand category for permanent staff during December, as was the case in the previous month.

Nonetheless, steep increases in vacancies were also seen across the other nine monitored sectors.

Nursing/medical/care was at the top of the rankings for temporary staff vacancies at the end of the year.

The softest increase in demand was meanwhile signalled for short-term retail workers.

Commenting on the latest survey results, Neil Carberry, Chief Executive of the REC, said:

"2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue.

“This survey shows again how tight the labour market was at the end of last year.

“Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling.

“These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021.”