The Markit/REC Report on Jobs –published today  – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Headline Findings

Staff appointments increase at softer pace 

Permanent placements continued to rise sharply in June, despite the rate of expansion easing slightly since May’s 25-month peak. Growth in temp billings also softened in June, but remained steep overall.

Demand for staff holds close to May’s 21-month peak 

Demand for staff continued to rise in June, with the rate of growth staying close to May’s recent peak. This was despite both permanent and temporary vacancies rising at slightly weaker rates than in the previous month.

Salary growth fastest for over a year-and-a-half… Permanent starting salaries rose at a sharp and accelerated rate that was the fastest in 19 months in June. Growth in hourly pay rates also quickened since May, and reached a six-month record.

…as candidate availability continues to decline 

The pool of available candidates for both permanent and temporary roles continued to shrink markedly in June. While the number of permanent candidates fell at a slightly softer pace than in May, the supply of temporary labour deteriorated at the quickest rate in 18 months.

UK employment rate at joint-record high 

The number of people in work in the UK rose to 31.95 million in the three months to April, according to the latest data released by the Office for National Statistics (ONS).

This highlighted an increase of 372,000 compared to a year earlier, and was the highest level of employment seen since records began in the early 1970s. Furthermore, the data shows that there are around three million more people in employment since the global financial crisis.

As a result, the employment rate held steady at a joint-record high of 74.8%. Broken down by gender, 79.5% of men aged 16- 64 were in employment (the highest since the three months to May 1991), while the number of women aged 16-64 in work was the joint-highest on record at 70.2%. The ONS noted that the uplift in the proportion of working women has been influenced by the ongoing changes to the State Pension age, which has reduced number of women that retire between 60-65 years old.

Commenting on the latest survey results, Tom Hadley, REC Director of Policy says:

“With fewer people currently looking for jobs, employers are having to increase starting salaries to secure the talent they need. This is creating great opportunities for people with in-demand skills who are prepared to change jobs, but it’s also putting unsustainable pressure on many businesses.

“Existing skills shortages are being exacerbated by Brexit. For example, demand for accountants and other financial roles has increased recently as organisations try to protect themselves against economic uncertainty. London alone employs almost 200,000 EU nationals* in these roles. Policies which make it more difficult to recruit and retain these people will put business growth at risk.

“Investment in training the domestic workforce is vital to the long-term health of the jobs market, but it won’t allay employers’ fears about losing access to workers from the EU. The government needs to outline a five-year roadmap for post-Brexit immigration policy to enable businesses to plan effectively, and so the UK economy can flourish.”

*London has 191,400 EU nationals working in the financial and businesses services sector – Building the post-Brexit immigration system, REC (July 2017)

You can download the full Markit/REC report here: Report on Jobs UK June 2017