Lockdown easing and vaccine drive lead to sharp increase in recruitment

The UK government’s plan to ease lockdown measures to return to more normal business operations in the months ahead and vaccine progress led to a marked improvement in recruitment activity in March.

The latest KPMG and REC, UK Report on Jobs survey to the sharpest rise in permanent placements for nearly six years, while temp billings growth accelerated sharply.

The anticipated upturn in activity once coronavirus restrictions are eased drove the quickest increase in overall vacancies since August 2018.

As a result, there were signs of improving pay trends, with both stating salaries and temp wages expanding for the first time in three months.

However, the availability of candidates remained broadly stagnant, largely due to concerns around how secure any new employment would be.

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

After rising only slightly in February, demand for workers grew rapidly at the end of the first quarter. Notably, the rate of expansion was the steepest seen for just over two-and-ahalf years, driven by marked increases in both permanent and temporary vacancies.

Starting salaries rose for the first time in 2021 to date and at a sharp rate.

Temp wages also increased for the first time in three months, with the rate of inflation the quickest seen since December 2019.

In the private sector, permanent vacancies increased at the sharpest rate for 32 months, while growth of shortterm positions hit the highest since September 2018. Public sector vacancy growth was subdued in comparison, despite both permanent and temporary roles rising solidly overall.

Nine of the ten monitored job categories recorded an increase in permanent staff vacancies in March.

The steepest rates of expansion were seen in nursing/medical/care and IT and computing. Retail was the only sector to register a decline.

Neil Carberry, chief executive of the REC, said:“For months, we have been talking about the potential recruiters saw for a recovery in hiring as we got on with vaccinations and the lockdown did its work.

“The data shows that even during lockdown, our labour market was bouncing back. The strong temporary recruitment trend of the past few months has been maintained, but with a new addition – the fastest increase in permanent job placements since 2015. Taken together with a long-awaited recovery in hiring in London, this is a sign that business confidence is starting to flow back, even at this early stage of unlocking.

“As companies start to recruit, they will need to appreciate that the labour market is still suffering from all sorts of shortages.

“So reviewing their hiring practices and doing things in the best way possible will matter more than ever. Inclusive hiring is not a tick-box exercise – it’s about finding the best candidate for the job no matter who they are, to help your business succeed. By working with professional recruiters, business leaders can help create fairer, more inclusive and more productive workplaces.”

Commenting on the latest survey results, Claire Warnes, partner and head of education, skills and productivity at KPMG UK, said:

“The UK job market is starting to rebound off the back of the Government’s plan to ease national lockdown measures over the coming months, with the highest rise in permanent placements in six years and a sharp increase in temporary billings.

“This is good news for businesses, job seekers and the UK economy, but employers are still identifying a big skills gap across sectors including IT, construction and retail, with demand and supply not matching up.

“That’s why as we start to look beyond the pandemic, businesses will be even more crucial in making sure prospective and current employees are adaptable, productive and ready for new challenges.”