Key points:

  • Growth of both permanent placements and temp billings accelerates
  • Salaries continue to rise strongly
  • Candidate availability remains tight


The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Faster growth of permanent and temporary appointments…

October data signalled a further increase in permanent staff placements. Growth was solid and the sharpest in four months. Temporary/contract staff billings also rose at a faster pace, with the rate of expansion at a three-month high.

…underpinned by robust demand for staff

Vacancies continued to rise at a marked pace in October. Growth of demand for permanent employees remained sharper than that for temporary/contract staff.

Strong salary growth maintained…

Permanent staff salary growth remained strong in October, and was similar to the rates seen during the third quarter. Temporary/contract staff hourly pay increased at a solid pace, albeit slower than that seen for permanent salaries.

…as candidate availability continues to fall

The availability of staff to fill permanent job roles fell further in October. Although easing to the slowest since January, the rate of decline remained sharp. Temporary/contract staff availability also decreased markedly, and at a slightly faster pace than in September.

Regional and sector variation

The Midlands led a broad-based increase in demand for permanent staff during October, followed by the North. Rates of expansion in the South and London were modest.

The sharpest rate of growth for temporary/contract staff was registered by agencies based in the Midlands, while those in the North saw the weakest increase.

Latest data signalled that demand remained considerably stronger in the private sector than the public sector. The sharpest overall increase was recorded for private sector permanent staff.

Accounting/Financial remained the most sought-after category for permanent staff in October. IT & Computing was in second place in the demand for staff ‘league table’. The slowest rise was reported for Hotel & Catering workers.

Nursing/Medical/Care retained top spot in the temporary/contract staff demand rankings during the latest survey period. The weakest increase was reported for Executive/Professional staff.


REC chief executive Kevin Green, says: “The jobs-rich recovery looks set to continue, with more people being placed into permanent positions last month and businesses across the UK creating more vacancies.

“However, there remains a big question about sustainability. Employers report an increasing number of skills shortage areas in both the public and the private sector. Starting salaries continue to rise as businesses battle to attract the people they need but it’s unclear how much longer this trend can continue.

“The government must focus on alleviating the skills crisis which threatens economic growth. We need a balanced approach to immigration so that businesses can bring in the people they need right now. Domestically, young people must be better incentivised to acquire the knowledge and skills that are needed most by hirers. A real commitment to delivering world-class careers advice and work experience would be a big step in the right direction.”

Bernard Brown, Partner at KPMG, comments: “While hiring continued at pace across most areas of the economy, the figures point to a worrying development in the construction sector.

“It is clear the industry is suffering from a chronic skills shortage along its entire supply chain, with recruiters struggling to meet demand for roles ranging from architects to construction workers.  As a result salaries in the sector are soaring, with the average weekly rise reaching 5.1%, vastly outpacing the private sector average of 3.4%.

“With Britain in the grips of a housing crisis, this shortage of skilled workers could throw a serious spanner in the works, slowing projects in the pipeline and pushing up overall build costs as developers bid high to secure the labour they need.  Businesses will want to see this addressed in the Autumn Statement, with measures to boost apprenticeships and encourage the return of small and medium sized builders, many of whom left the industry in the midst of the recession.  By addressing this crucial capacity issue and rebalancing the industry away from the bigger developers, Britain can build the skills base it needs.”