The UK saw a further rise in hiring activity during August as business confidence continued to grow, however, the number of workers available to fill roles fell at another record rate.
The recent KPMG and REC Report on Jobs revealed that the drop in candidate supply has resulted in sharper increases in starting pay – salaries for newly-placed permanent staff increased at the fastest rate seen in nearly 24 years, while temp wage inflation was the second-quickest on record.
Neil Carberry, Chief Executive of the REC, commented, “In August, the number of staff available to start jobs fell at another new record rate, deepening the current labour shortage. Recruiters are working around the clock, placing more people into work than ever as these figures show. Switching the entire economy on over the summer has created a unique demand spike, and a short-term crisis.
“But it would be a mistake for businesses to think of this as only a short-term issue. A number of factors mean that the UK labour market will remain tight for several years to come. Business leaders should be looking now at how they will build their future workforces, in partnership with recruiters, including the skills and career path development.”
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Email JaimeClaire Warnes, Head of Education, Skills and Productivity at KPMG UK, added, “Candidate shortages continue to plague businesses, who are all recruiting from the same pool of talent and struggling to fill gaps. While record high permanent placements and higher starting salaries mean it remains a job seekers market, recruiters and employers have seen the most severe decline of candidate availability in the survey’s history and will be thinking about how to attract and retain new staff.
“This crisis isn’t going away, and the winding down of the furlough scheme at the end of September – while potentially bringing more job hunters to the market – could also add fuel to the labour shortage fire. Many businesses will have changed their business model during the pandemic, and so significant numbers of staff returning from furlough may need reskilling to rejoin the workforce in the same or another sector.
“Right now, businesses can lead the way by working with government and civic leaders to rapidly address the reskilling and upskilling that is so urgently needed.”
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