UK Skills shortage could mean unhappy Christmas

The number of people placed in permanent jobs continued to rise in November. However, the rate of growth was the slowest for one-and-a-half years. This was the conclusion of the latest monthly Report on Jobs published today by The Recruitment and Employment Confederation (REC) and KPMG from data supplied by recruitment consultancies.

On a positive note, starting salaries for successful candidates placed in permanent jobs rose since October's eight-month low, and comfortably above the survey's long-run trend. Temp pay growth remained solid and rose slightly faster than in the previous month.

Agency billings from the employment of temporary and contract staff increased again in November, with the rate of expansion quickening from that recorded in the previous survey period. 

Regional variations showed the growth of temp billings was fastest in the Midlands and weakest in the South of England. This was echoed in the growth of permanent placements with Midlands-based consultancies showing strongest growth while the slowest rise was signalled in London.

Data signalled that growth in demand remained considerably stronger for private sector roles than public sector vacancies in November. In both cases, permanent staff saw a faster rise than temporary/contract employees.

Demand was higher in the private sector than for public sector vacancies while Engineering remained top of the demand for staff ???league table' in November, with Accounting/Financial in second place. The slowest rise in demand was reported for Hotel & Catering workers.

IT & Computing employees were the most in-demand got short-term roles in November, fractionally ahead of Blue Collar. Construction workers registered the weakest growth in demand.

"It's been a strong year for the UK labour market and it's a sign of continuing business confidence that employers are expanding their permanent workforces and are prepared to make more generous offers to new recruits to attract the right people.  Over a quarter of recruiters say that starting salaries for equivalent jobs are getting better by the month, driven by competition between employers for quality candidates", said Kevin Green, CEO of the REC.

"If there's a cloud on the horizon for 2015 it's the intensifying skills shortages which now span many sectors and is particularly acute in high-skilled areas like engineering, IT and medicine. It's not just about graduates, vacancies for skilled manual jobs are getting harder to fill as well."

He warned "The shortage of licensed HGV drivers and forklift operators could mean retailers struggle to meet the Christmas demand generated by Cyber Monday and eager shoppers on the high streets."

Bernard Brown, Partner and Head of Business Services at KPMG, was more cautious about the prospects for the jobs market saying "Not much sign of a happy Christmas in the job market. The rate at which permanent contracts are being signed is rising at the slowest rate in 18 months. This follows an unexpected fall in investment in the UK in Q3".  He questioned whether this was the start of a negative trend.

Kevin Green also raised a note of caution for the future. "In the longer term, skills shortages could jeopardise delivery of major infrastructure projects announced in this week's Autumn Statement."

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