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The UK continues to suffer from a shortage of candidates, according to the latest IHS Markit/Recruitment & Employment Confederation ‘Report on Jobs’.

March’s report signalled a further sharp increase in permanent staff placements across the UK, with the pace of expansion edging up fractionally since February, contrasting with temp billings which expanded at the weakest pace for over a year.

Staff vacancies continued to rise markedly at the end of the first quarter, despite growth of demand easing slightly to the lowest for 15 months, driven by a weaker upturn in temporary roles.

Overall candidate availability continued to decline sharply during March, though at its weakest rate for a year. A softer drop in permanent candidate supply contrasted with a slightly quicker deterioration in temp staff availability.

The growth in permanent staff placements was once again led by the Midlands, though rates of growth were marked across all of the UK regions monitored by the survey.

Regionally, Scotland saw the sharpest rise in temp billings at the end of the first quarter, though growth was also sharp across the Midlands and the South of England. Modest growth was registered in London and the North of England.

Engineering led the rankings for demand for permanent staff during March, closely followed by IT & computing, while hotel & catering saw the biggest increase in demand for short-term staff, followed by blue collar.

Commenting on the findings, REC director of policy Tom Hadley said while more people are entering employment, it is not compensating for the shortfall of candidates for many roles, from cyber security and aerospace through to sewing machinists and drivers.

“As a result, employers are increasing starting pay to draw candidates away from current roles into new positions. Growth in pay for temporary roles especially is accelerating. In hospitality, demand for temporary staff is really high, but businesses have had fewer applicants from the EU since the Brexit vote. Employers are working hard to make themselves attractive to UK nationals, but they will still need temporary roles to be filled by EU nationals post-Brexit and the government must allow for this.”

“Candidates planning to move jobs have a strong chance of getting a pay rise . With inflation outstripping pay growth for over a year now, high pay offers will be tempting, as the pressure on starting salaries still isn’t translating into pay rises for staff who stay put. Employers need to look at other means to keep staff, such as creating a good workplace culture and offering progression opportunities.”

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