The current state of the jobs market is a tale of two halves. We absolutely don’t want to shy away from the tremendous recovery, evidenced in record-breaking data. However, we need to temper this by honestly acknowledging the difficulties we are facing due to not enough candidate supply.
As Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG says:
“June’s data confirms that momentum in the jobs market continues to surge… But for the fourth month running we’re seeing a decline in the availability of candidates to fill all these new roles and the most severe deterioration for 24 years.”
What’s June’s data telling us?
The data from June is both incredibly good and a little concerning. On one hand there’s been an unprecedented increase in the number of people being placed in permanent roles. But on the flip side we’ve not got enough candidates available.
Exceptional growth for both permanent and temporary jobs
As businesses return to ‘business as usual’ we’re seeing greater market confidence and recruitment activity is gaining speed. Indeed, the number of people being placed in permanent roles has expanded at the fastest rate since the REC began collecting data.
Demand for new workers is ‘unprecedented’
The total number of available vacancies is growing fast too, again at the fastest speed since The Report on Jobs began 24 years ago.
Candidate availability is dropping fast
But conversely, this is spurring on a significant fall in the availability of candidates – indeed, a fall that represents the fastest rate on record. This applies to both permanent and temporary candidates.
There are various reasons for this, but we can confidently say that it’s not just the increased push for candidates but also issues such as Brexit, the furlough scheme and pandemic-related anxiety.
Pay is increasing
It’s therefore not surprising that starting salaries and temporary wages are seeing rapid rises. Permanent salaries have increased at the sharpest rate since July 2014 and temp hourly rates at the fastest pace since 2004.
Optimism and confidence, with some caveats
Overall, optimism and confidence are increasing apace in the British economy and jobs market, as recovery gathers momentum. However, we can’t rest on our laurels.
We need to look at the indications that there are still notable challenges ahead. We’re still being reminded that we’ve probably not reached the peak of unemployment, most notably by the Bank of England and the Office for Budget Responsibility, as this will likely come following the end of the furlough scheme.
The skills shortage isn’t new news. But it is growing in significance, and we need to start taking very real concrete steps to address this.
The current picture is very similar across the whole of the UK, and Ian Beaumont, office senior partner for KPMG in Newcastle puts it clearly:
“More must be done to the meet the shortage of skills we face in the north so we can fill vacancies. Reskilling and upskilling, including training on the job, must become more readily available and achievable to encourage those who are out of jobs to look in other sectors and diversify their skills.”
It’s a message we need to take heed of across the country so that our recovery isn’t hindered, and candidates and employers both get what they need.