UK employers sought new staff in August 2017 at the briskest pace since April 2015, the latest IHS Markit/REC Report on Jobs reveals.

Despite Brexit uncertainties and the impact of controversial new IR35 rules in the public sector, demand for both permanent and temporary/contracting staff in both the private and public sectors climbed.

Pay rates also rose for both categories of workers as employers struggled to attract talent in a context of dwindling candidate availability.

For temporary/contracting staff, pay rates rose at the fastest pace in 16 months, while starting salaries for permanent staff accelerated for the fourth consecutive month and at the quickest pace since October 2015.

These pay increases occurred against the background of further declines in candidate availability for permanent roles, which fell sharply in August and more rapidly than in the previous month.

The pool of temporary/contracting talent diminished to the greatest extent in 20 months.

Demand for staff in the private sector rose again in August, with vacancy numbers for both permanent and short-term/contracting roles expanding at similarly vigorous rates.

Following a familiar pattern, growth in demand for staff in the public sector was less pronounced than in the private sector but remained steep even so. Demand for short-term/contracting workers in the public sector grew at a pace that outstripped that for permanent staff.

In terms of industry sector, the Blue Collar category was at the top of the demand “league table” for contractor/temporary staff. Engineering took the runner-up slot, and Nursing/Medical/Care came in third place. All of the remaining categories monitored in the survey also registered brisk rates of growth.

For permanent roles, vacancies were greatest in IT & Computing, closely followed by Accounting/Financial. As with temporary/contracting staff, demand grew in all monitored job sectors, although Construction registered the weakest expansion in permanent staff demand.

Commenting on the findings, REC CEO Kevin Green said: “Employers are increasingly turning to recruitment agencies as it becomes harder to find the people to fill the jobs available.

“There are two trends at play. Businesses are seeking more professional and managerial capability, so we’re seeing high demand for roles like financial directors, analysts and compliance and HR professionals. Meanwhile, there is a significant shortage of people to fill blue collar roles such as drivers, electricians and construction workers, and this is being exacerbated by a fall in net migration from the EU.”

Despite a general wage squeeze, Mr Green noted, new opportunities existed for people willing to move jobs.

The report clearly shows that despite candidate shortages, temporary/contractor placements still managed to climb at the same vigorous rate as July’s 29-month high, while permanent placements also rose robustly.

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