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  • Writer's pictureDan Malkoun

Starting Pay for New Candidates and jobseekers Continues to Grow

Updated: Aug 3, 2023

Recruitment activity in February may have slowed slightly, but the lack of suitable candidates continued, fuelling yet further increases in starting pay. Overall vacancies expanded at the quickest rate for three months in February, marking the first acceleration of growth since last July.

Recruitment Activity Eased in February

Although the number of people placed into permanent job roles increased during February, the rate of expansion softened for the third month in a row and was the slowest since March 2021. Although there is a strong demand for staff amid rising activity levels in businesses, it is reported that shortages of candidates continue to limit the ability to fill roles. The permanent placements index stands at 65.3 with an easing showing in all regions apart from the North which saw a sharp increase in activity and stands at 67.4 on the index.


February survey data indicated that total vacancies increased at the quickest pace since last November, the first time that growth of overall demand for staff had picked up for seven months. The stronger rise in total vacancies was driven by quicker increases in both permanent and temporary roles with the growth of permanent staff demand accelerating for the first time since last July. According to the Office for National Statistics (ONS),  vacancies more than doubled in the UK in the three months to January 2022 to 1,298,000.

Which Sectors are Hiring?

The quick answer is everyone! Sharp increases in permanent staff demand were seen across all ten monitored job categories midway through the first quarter. The front runners were IT & Computing and Accounting, and while Secretarial/Clerical and Executive/Professional may have been at the bottom of the list, there is a very high demand for candidates in these areas.

Candidate Availability

The total supply of candidates fell for the twelfth month running in February, the quickest decline since the start of the year, indicating that businesses are struggling to find the right people to fill their roles and so an increase in starting pay. All of this led to a further rapid increase in starting salaries during February. Data from ONS indicated that employee earnings increased +4.3% on an annual basis in the three months to December.

Despite ongoing issues with inflation and the situation in Ukraine, the jobs outlook report indicated early signs of a recovery in business confidence levels and starting pay. However, how this continues as we progress into 2022 remains to be seen. The labour market is tight, and vacancies continue their upwards trend, while unemployment continues to decrease meaning there are fewer candidates available to fill the gaps. With an anticipated rise in National Insurance in April, a perfect storm is brewing with an increase in costs for businesses. The situation will get worse before it gets better.

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