Placements of temporary/contracting staff accelerated vigorously in May, while the availability of candidates for both short-term and permanent roles declined, the latest Report on Jobs from the Recruitment and Employment Confederation (REC) reveals.

Permanent staff placements also accelerated robustly last month, climbing at the fastest pace since April 2015. Temp billings, meanwhile, climbed at the briskest pace since March 2015.

However, the availability of candidates for both short-term/contracting and permanent vacancies fell more sharply than in April, with numbers declining at a rate not seen for 16 months.

This appears to have had a measurable impact on pay offers. Hourly rates for short-term/contracting staff climbed again, albeit at a softer rate than that recorded in April. Average starting salaries for those beginning in new permanent roles climbed at the strongest rate in three months.

Billings for short-term/contracting staff rose most steeply in the Midlands, with the North coming in second place. The South of England recorded the slowest rate of growth.

The rise in permanent placements occurred in all the UK regions monitored in the monthly survey of REC member recruiters, with London and the South leading the way.

Demand, as measured by the number of vacancies, was stronger in the private sector for temporary/contracting staff in May than in April, while that for permanent staff eased slightly month-on-month. Even so, growth for both categories of staff remained generally robust.

In the public sector, demand for both permanent and temporary/contracting staff also grew. The rise in demand for the latter was the strongest since July 2015. Job vacancies for permanent staff rose for the first time in three months.

Commenting on the findings, the REC’s Director of Policy, Tom Hadley, underlined the inherent dilemma facing the next Government: while demand for staff is growing impressively, reaching the strongest level in two years, the availability of people to take on these roles “has plummeted.”

Official statistics, he said, demonstrate that UK unemployment has fallen to the lowest point since 1975. Meanwhile, EU citizens are exiting the UK “in droves.” Employers, Hadley contended, “are running out of options.”

He continued: “Skill shortages are causing headaches in many sectors. The NHS, for example, is becoming increasingly reliant on short-term cover to fill gaps in hospital rotas because there aren’t enough nurses to take permanent roles. Meanwhile, the shortage of people with cyber security skills is a particular concern in many businesses in the wake of the recent high-profile WannaCry attacks.”

Mr Hadley called on the next Government to “improve the employability” of young people and to recognise that UK businesses and public services need more candidates.

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