Salaries rise as candidate availability falls

 

Salaries on offer for permanent vacancies rose sharply in June in response to a shortage of candidates, according to UK recruitment consultancy and employer data.

The latest Report on Jobs, published by the Recruitment and Employment Confederation (REC) and KPMG, highlighted a marked fall in the availability of candidates to fill permanent roles. The rate of contraction was the sharpest seen since the survey began in October 1997. Availability of temporary and contract candidates also fell sharply, with June’s fall being the largest since March 1998.

Amid the shortage of permanent candidates, and with demand for staff increasing, permanent salaries rose during June at the highest rate since the survey began. This means salaries have now risen for 26 months in succession. In addition, hourly pay rates for temporary and contract staff rose at the sharpest rate since November 2007.  

June’s data highlighted faster increases in demand for both permanent and temporary staff. Growth was led by the private sector, with demand continuing to rise at a rate that outstrips that in the public sector. Meanwhile in both the public and private sectors, demand for temporary workers rose at higher rates than those for permanent staff. 

REC CEO, Kevin Green, said: “June saw record growth in starting salaries and yet another monthly increase in the number of people securing a permanent job.

“However, this month sees the number of workers available to fill vacancies plummet to an all-time low.

“The message to UK businesses is that it is crucial to sharpen up hiring procedures in an increasingly candidate driven market. The message to government is that we need to reform the visa system to satisfy immediate demand for skills, whilst stepping up measures to boost the UK skills base for the long-term.”

Bernard Brown, Partner and Head of Business Services at KPMG, comments: “Once again employers seem ready to ‘splash the cash’ in what appears to be a desperate attempt to lure skilled staff from competitors. Yet despite offering starting salaries at a rate that has not been seen during the survey’s 17 year lifetime, it is clear that candidates are not easily swayed. 

“It’s a message employers would do well to take to heart as, although many might argue that by offering higher pay packets, they are showing market confidence, the truth is that continued starting salary growth is unrealistic and unsustainable over the long term. 

“Ultimately candidates are also suggesting this by voting with their feet, because we have also just witnessed the biggest fall in candidate availability for 17 years. Perhaps this means that the productivity gap is being replaced with another chasm – a vacancy vacuum – and one that is unlikely to be resolved until employers recognise that, for staff, remuneration is about much more than take home pay.”

Tuesday, 8 July 2014

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Salaries rise as candidate availability falls
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