Starting salaries continue to rise at near-record pace in busy start to 2022

The latest KPMG and REC, UK Report on Jobs survey signalled a further steep increase in hiring activity at the start of 2022.

Permanent placement growth eased slightly since December, however, while the upturn in temp billings gathered pace.

The overall availability of candidates deteriorated at a quicker pace in January, driven by a steeper fall in permanent staff supply. Robust demand for workers and scarce candidates led to further marked upward pressure on rates of starting pay.

Starting salaries increased at the third-fastest pace on record, while temp pay growth remained sharp despite easing to a seven-month low.

Vacancies data meanwhile showed that demand for workers continued to rise at a historically sharp pace, despite overall growth edging down to its lowest for nine months.

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

Recruitment activity continues to rise sharply at start of 2022

The easing of pandemic restrictions, improved market confidence and strong demand for workers drove a further steep increase in recruitment activity across the UK during January.

Permanent placement growth remained sharp, despite easing to a three-month low, while temp billings expanded at the quickest rate since last August.

Starting salary inflation remains close to record pace

Robust demand for staff and candidate scarcity drove up rates of starting pay for both permanent and temporary staff at the start of the year.

Starting salaries rose at the thirdsharpest rate on record (since October 1997), beaten only by those seen last October and November.

Temp wage inflation also remained rapid, despite the pace of increase easing to a seven-month low.

Quicker fall in overall supply of candidates

The rate of decline in overall candidate availability quickened for the first time in five months in January.

Though not as steep as those seen during last summer, the rate of deterioration remained substantial overall.