Recruitment in June was at an all-time high
The signs of recovery in the jobs market continue to shine through as we come to what we hope will be the end of the worst of the Covid Pandemic. Momentum in the jobs market continues to surge, with improved business confidence leading to record high recruitment activity with permanent role availability increasing at the quickest rate since the Rec Jobs Outlook survey began in 1997 and temporary roles rising to the greatest extent for 23-and-a-half years.
Demand for Workers is High
There is an unprecedented demand for workers right now as the permanent placements increased from 67.4 in May to 71.2 in June with the Midlands seeing the highest levels of demand. Stronger market confidence and rising demand for workers has driven the latest upturn in permanent staff appointments and new projects lifted temp billings to 63.4.
Accelerated Growth in Vacancies
Staff vacancies accelerated further in June, with the latest expansion being the quickest since the survey began in October 1997. Demand for permanent workers rose for the fifth successive month in June and temporary staff vacancies also expanded with the rate of increase hitting a 23-and-a half-year high. The private sector is still seeing the strongest growth, but demand for staff was also historically strong across the public sector. According to data from ONS, vacancies stand at 758,00 in the three months to May which is the highest level of vacancies recorded since the three months to March 2020.
Which Sectors Are Booming?
As has been the case throughout the pandemic, Tech, Engineering and Accounting are still topping the list of the sectors with the most vacancies. But Hotels and Catering are now in second place as travel and tourism open up more as rules are relaxed.
This is where it gets a bit sticky. We have seen increasingly throughout 2021 a shortage of available candidates and this did not change in June with an unprecedented drop in candidate availability. The rate of decline was the sharpest since the survey began in October 1997 and around 59% of recruiters noted a reduction in permanent worker supply. Anecdotal evidence indicates that greater demand for staff, pandemic-related uncertainty, fewer foreign candidates (particularly from Europe) and the furlough scheme all weighed on candidate numbers.
Permanent Salaries for new employees rose again in June, extending the current sequence of increasing pay to four months. Notably, the rate of inflation was the strongest since July 2014 due to increased competition for scarce workers. The ONS has signalled that employee earnings (including bonuses) increased +5.6% year-on-year in the three months to April 2021. This was up from +4.3% in the first quarter, and the quickest rate of growth since the three months to March 2007.
We continue to witness more signs of economic recovery as more sectors of the economy began to reopen. UK GDP has been rising month on month and in April, it was estimated to have grown by 2.3%, which was the fastest rate of growth since July 2020. However, even though two-thirds of British adults have now been vaccinated, there is still uncertainty surrounding the Delta variant that is seeing Covid cases increasing at an unprecedented rate, and this could lead to a slow down in our potential recovery.