UK Labour Market
UK Labour Market
July 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent placements fall for first time since September 2012 The Report on Jobs is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation. The report features original survey data which provide the most up-todate monthly picture of recruitment, employment, staff availability and employee earnings trends available.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Billings
65 60 55 50 45 40 Permanent Placements 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
3 Vacancies
Key points from the June survey:
4 Sectoral demand
Brexit concerns hit recruitment activity in June
5 Staff availability
Pay growth slows further
6 Pay pressures
Candidate availability continues to deteriorate
7 Special feature Commenting on the latest survey results, REC chief executive Kevin Green says: “Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects. Markit Henley on Thames Oxon RG9 1HG, UK Tel: +44 1491 461000 Fax: +44 1491 461001 email: [email protected] Copies of the report are available on annual subscription from Markit. For subscription details please contact: [email protected]
“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like. “We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU. “Before the referendum, businesses were already finding it increasingly hard to source the right candidates. Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”
Report on Jobs | Recruitment Industry Survey
1
Executive summary
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. The main findings for June are:
Drop in permanent placements...
The number of people placed in permanent positions fell in June. Although slight, it was the first decline in 45 months. Anecdotal evidence suggested that uncertainty in the lead-up to the EU referendum (data were collected between 13-24 June) had heavily impacted on activity.
...while temp billings rise at slower rate
Although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low. Brexit uncertainties were frequently cited by survey respondents.
Pay growth continues to ease
June data pointed to a further easing of permanent salary growth. The latest increase was the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.
Further drop in candidate availability
The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.
Staff Appointments 50 = no change on previous month 70
50=no change on previous month 70
Temp/Contract Billings
65
65
60
60
55
55
50
50
45
45
40
40
35
35
Permanent Placements
30
30
25
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Demand for staff 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45 40
Permanent Vacancies
35 30 Increasing rate of decline
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Staff Availability and Earnings Growth 50 = no change on previous month 70 65
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
40
60
50
55
60
50
70
45 40
Average permanent salaries (LHS)
35
80 90
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
All Intellectual Property Rights owned by Markit
30
Report on Jobs | Recruitment Industry Survey
2
Staff appointments
Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
60 55
Permanent placements fall for first time since September 2012
50 45
The number of people placed in permanent jobs decreased in June. Although marginal, it was the first drop in 45 months. Heightened uncertainty in the run-up to the UK’s EU referendum was widely reported by panellists, with many clients holding off on decisions. London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.
Agencies’ billings from the employment of temporary/contract staff rose further in June. However, the rate of growth eased to the slowest in nine months. As was the case for permanent appointments, Brexit uncertainty was commonly cited by panel members in the latest month. Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland. An index reading above 50 signals a higher number of placements/billings than the previous month. Readings below 50 signal a decline compared with the previous month.
Temp/Contract Billings
65
Recruitment consultants indicated a slight drop in permanent staff placements during June, while temporary/contract staff billings rose at a slower pace.
Weaker rise in temp billings
Increasing rate of growth
40 35
Permanent Placements
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Jan 42.7 Feb 44.8 Mar 37.7 Apr 38.1 May 37.1 Jun 33.4
28.4 29.3 35.9 34.1 31.5 34.7
28.9 25.9 26.3 27.8 31.4 31.8
13.7 18.8 11.4 10.4 5.7 1.6
Index S.Adj. 50 = no chg Index
56.9 59.4 55.7 55.2 52.9 50.8
56.0 56.6 53.7 53.4 52.9 49.3
Temporary/Contract Staff Billings Q. Please compare your billings received from the employment of temporary and contract staff with the situation one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Jan 20.3 Feb 32.5 Mar 38.6 Apr 34.9 May 35.3 Jun 32.3
40.7 44.6 46.8 43.7 42.3 46.3
39.0 22.9 14.6 21.4 22.4 21.4
-18.7 9.5 24.0 13.4 12.9 10.9
Index S.Adj. 50 = no chg Index
40.7 54.8 62.0 56.7 56.5 55.4
54.4 54.4 56.4 59.1 56.4 52.3
Report on Jobs | Recruitment Industry Survey
3
Vacancies
Recruitment consultants are asked to specify whether the demand for staff from employers has changed on the previous month, thereby providing an indicator of the number of job vacancies. The summary indexes shown in this page are derived from the detailed sector data shown on page 5.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Slowest vacancy growth in over three years
Dropping to 57.9 in June, from 59.4 in May, the Report on Jobs Vacancy Index signalled that the rate of expansion in demand for staff eased to a 37-month low. Slower increases in demand were signalled for both permanent and temporary staff in the latest survey period.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65
Public & private sector vacancies
60
Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.
55
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35 30
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 2.3% on an annual basis in the three months to May. That was the fastest growth since the three months to February. Internet-based recruitment spending fell -6.7% on a yearon-year basis in the final quarter of 2015. This was the first drop since the third quarter of 2012. Moreover, the rate of decline was the sharpest in six years. The Job Vacancies Index monitors the overall demand for staff at recruitment consultancies. An index reading above 50 signals a higher number of vacancies than the previous month. Readings below 50 signal a decline compared with the previous month.
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Job Vacancy Indicators
Feb’16
Mar
Apr
May
Jun
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
62.3 62.4 60.0
59.9 60.1 57.5
59.1 59.2 58.0
59.4 59.4 59.4
57.9 57.9 58.2
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
47.0 51.1 67.2 58.8
48.6 53.8 66.2 60.6
48.7 50.7 60.9 60.1
50.7 52.0 62.0 61.9
50.4 53.0 58.6 63.2
Job centre vacancies 3.6 Internet recruitment -6.7
1.9 --
2.0 --
2.3 --
n/a --
Other key vacancy data Annual % change
Sources: Job centre vacancies provided by ONS via EcoWin.
Internet recruitment spending provided by WARC.com
All Intellectual Property Rights owned by Markit
Report on Jobs | Recruitment Industry Survey
4
Demand for staff by sector
Recruitment consultancies are requested to compare the demand for staff according to sector with the situation one month ago.
Demand for staff 50 = no change on previous month
90
Permanent staff
Engineering staff topped the ‘league table’ in June, recording the strongest growth of the nine monitored categories. In second place was Nursing/Medical/Care. Hotel & Catering staff on the other hand saw only a modest rise in demand. This year Rank Jun'16
Engineering* Nursing/Medical/Care Accounting/Financial IT & Computing Executive/Professional Construction* Secretarial/Clerical Blue Collar Hotel & Catering
1 2 3 4 5 6 7 8 9
61.4 60.0 59.1 58.0 57.1 56.6 56.4 55.6 51.5
(Last year) Rank Jun'15
(2) (1) (5) (4) (3) (8) (6) (7) (9)
(68.4) (70.3) (65.0) (65.4) (66.4) (58.6) (63.3) (59.2) (56.8)
Nursing/Medical/Care Hotel & Catering Secretarial/Clerical Construction* Blue Collar Engineering* Accounting/Financial IT & Computing Executive/Professional
his year T Rank Jun'16
1 2 3 4 5 6 7 8 9
67.4 62.3 59.7 58.9 58.8 57.9 56.8 52.8 51.4
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Jun'15
(1) (9) (3) (6) (4) (2) (5) (7) (8)
(68.7) (58.3) (61.9) (61.0) (61.5) (64.8) (61.1) (60.6) (58.8)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
50 T em p
40 30
30 20
2002 2004 2006 2008 2010 2012 2014
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014
Hotel & Catering
80
70
T em p
70
T em p
60
60 50
50 P erm
40
30
30
20
20
2002 2004 2006 2008 2010 2012 2014
90
Nursing/Medical/Care 90
80
80 T em p
70
60
50
50 P erm
40
P erm
2002 2004 2006 2008 2010 2012 2014
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014
20 2013
90
T em p
P erm
40
Construction P erm
80 70
Data are presented in the form of diffusion indices whereby a reading of 50 indicates no change on the previous month. Readings above 50 signal stronger demand than a month ago. Readings below 50 signal weaker demand than a month ago.
IT & Computing
60
50
20
2002 2004 2006 2008 2010 2012 2014
70
60
40
T em p
40
30
20
P erm
60
80
Nursing/Medical/Care workers saw comfortably the sharpest rise in vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/Professional staff.
P erm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
90
Secretarial & Clerical
80
60 50
T em p
40 30 20 2013
2014
2015
2014
2015
Report on Jobs | Recruitment Industry Survey
5
Staff availability
Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month. An overall indicator of staff availability is also calculated.
Staff Availability 50 = no change on previous month
Improving availability
90 80
Availability of permanent staff
Staff Availability Index
70
The availability of candidates to fill permanent roles fell further in June. Moreover, the rate of deterioration accelerated since May and was marked overall. Around 33% of panellists reported lower permanent staff availability, compared with just under 10% that noted a rise. The sharpest fall in permanent candidate availability was seen in the Midlands, while London registered the weakest decline.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
Short-term staff saw a further deterioration in demand for their services during June. That said, the latest fall in temp availability was the least marked in 33 months. The Midlands saw the sharpest drop in temp availability. In contrast, Scotland posted a slight improvement.
60 50 40 Temp Availability
Permanent Availability
Deteriorating availability
30 20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Availability of permanent staff
Key permanent staff skills reported in short supply:* Accountancy/Financial: Audit, Compliance, Financial Planners, Paralegals, Paraplanners, Sales, Tax Accountants. Blue Collar: Fork Lift Drivers. Construction: Estimators, Project Managers, Quantity Surveyors. Engineering: Architectural Technicians, Design Engineers, Manufacturing Engineers, Process Engineers, Rail. Nursing/Medical/Care: Care Assistants, Care Workers, Home Carers, Nurses. Other: Chefs, Teachers, Telesales.
Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
*consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
All Intellectual Property Rights owned by Markit
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Jan 25.5 Feb 15.5 Mar 9.1 Apr 12.4 May 10.9 Jun 9.7
48.5 55.7 58.9 58.7 59.0 57.8
26.0 28.8 32.1 28.9 30.1 32.5
-0.5 -13.4 -23.0 -16.5 -19.2 -22.8
49.7 43.3 38.5 41.7 40.4 38.6
38.9 40.2 39.9 40.9 41.5 40.7
Availability of temporary/contract staff
Key temp skills reported in short supply:* Accountancy/Financial: Sales Negotiators. Blue Collar: Forklift Drivers, LGV Drivers, Welders. Construction: Bricklayers, Designers, Plumbers, Scaffolders. Executive/ Professional: Quality Roles. Engineering: Electrical Engineers, Production, Maintenance. IT/Computing: Web Developers. Nursing/Medical/Care: Care Workers, Home Carers, Nurses. Secretarial/Clerical: Admin. Other: Call Centre, Customer Service, Teachers.
Better %
Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Jan 22.2 Feb 16.4 Mar 15.4 Apr 13.5 May 12.0 Jun 16.3
55.4 61.7 58.8 63.1 64.6 59.1
22.4 21.9 25.9 23.4 23.3 24.6
-0.2 -5.6 -10.5 -9.9 -11.3 -8.3
49.9 47.2 44.7 45.1 44.3 45.8
40.0 42.3 45.0 45.7 46.0 46.5
Report on Jobs | Recruitment Industry Survey
6
Pay pressures
The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.
Pay Pressures 50 = no change on previous month 70 65
Permanent salaries
Average starting salaries for candidates placed in permanent jobs increased further during June. However, the rate of growth eased to a 33-month low. Those panellists reporting a rise in salaries generally attributed this to competition for candidates with scarce skill sets. The Midlands posted the fastest rise in permanent salaries and a slightly sharper increase than in May. Elsewhere, salary growth eased.
60 55 50 45
Temp/contract pay rates
40
Hourly rates of pay for staff in temporary/contract employment rose further during June. That said, the latest increase was the least marked in three months. The impact of the National Living Wage was again reported as a factor contributing to higher temp pay. Weaker increases in temp pay were reported in the Midlands, South, North and Scotland. Only London saw an acceleration, but still the joint-slowest rise overall.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
Yr/yr % chg in average weekly earnings (3mma) 2013
2014 Jan'16
Feb
Mar
Apr
Whole economy 1.4
1.2
1.2
2.2
1.9
2.0
2.0
Private sector
1.4
1.4
1.4
2.4
2.0
2.2
2.1
Public sector
1.6
0.9
0.3
1.3
1.3
1.6
1.7
Services
1.4
1.1
1.0
2.0
1.6
1.7
1.6
Manufacturing 1.8
2.3
2.2
1.6
1.7
1.7
1.6
Construction
0.3
0.9
7.2
8.1
8.3
8.4
1.0
9 Public sector 6
3
0 Private sector -3
-6 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2015 Dec 20.6 2016 Jan 19.4 Feb 22.9 Mar 24.5 Apr 26.0 May 22.0 Jun 17.3
73.1 75.3 72.2 70.9 68.8 74.2 78.9
6.3 5.3 5.0 4.5 5.2 3.8 3.7
14.3 14.1 17.9 20.0 20.8 18.2 13.6
57.2 57.0 59.0 60.0 60.4 59.1 56.8
58.7 58.5 59.3 59.9 59.1 58.2 56.8
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
Annual percent change
2001
Increasing rate of decline
Permanent Salaries
Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) remained at 2.0% in the three months to April 2016. Private sector workers continued to see faster earnings growth than those in the public sector. Construction sector earnings were up 8.4%, the strongest growth since October 2001.
2012
Temp/Contract Hourly Pay Rates
35
UK average weekly earnings
Increasing rate of growth
Permanent Salaries
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2015 Dec 12.1 2016 Jan 13.4 Feb 11.1 Mar 16.1 Apr 24.3 May 19.7 Jun 15.7
82.3 79.0 82.7 79.5 71.6 75.4 77.9
5.6 7.6 6.1 4.4 4.1 5.0 6.4
6.5 5.8 5.0 11.7 20.2 14.7 9.4
53.2 52.9 52.5 55.9 60.1 57.3 54.7
55.3 54.2 52.8 55.1 60.5 58.2 55.5
Report on Jobs | Recruitment Industry Survey
7
Feature Pay reviews by sector
Pay reviews remain generally subdued but sectoral variation evident UK pay reviews have led to disappointingly weak increases in pre-tax salaries during 2016. Survey data collected in the four months to June signal an average annual rise of just 1.4%. While this is higher than the 1.0% increase indicated in 2015, it is slightly below the 1.5% rate seen in 2014. However, the representative survey of 4,000 British households, compiled by Markit using data collected by Ipsos MORI, signalled varying fortunes by sector. Manufacturing sector workers saw the strongest uplift to pay, with a 2.0% rise. Close behind was Media/Culture/Entertainment with a 1.9% increase, followed by Construction and IT/Telecoms (both 1.8%).
UK pay reviews M anufac turing M edia/Culture/E ntertainm ent Cons truc tion IT/Telec om s Financ e/B us ines s s ervic es Retail O ther s ervic es Utilities /E nergy /Trans port E duc ation/Health/S oc ial 0
0.5
1
1.5
The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry. Find out more on www.rec.uk.com.
is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on Nasdaq under the symbol MRKT. For more information, please see www.markit.com.
All Intellectual Property Rights owned by Markit
2.5
Source: Markit.
At the other end of the scale, Education/Health/Social services workers saw a rise of just 0.9%. The Utilities/Energy/Transport category posted the second-weakest increase, at 1.1%.
2
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by Markit from a panel of 400 UK recruitment and employment consultancies. In 2014/15, 1,197,928 people were employed in either temporary of contract work through consultancies and 633,992 people were placed in permanent positions through consultancies. Monthly survey data were first collected in October 1997 and are collected in the end of each month, with respondents asked to specify the direction of change in a number of survey variables. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. The intellectual property rights to these data are owned by or licensed to Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of Markit Economics Limited’s intellectual property rights. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.
July 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent placements fall for first time since September 2012 The Report on Jobs is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation. The report features original survey data which provide the most up-todate monthly picture of recruitment, employment, staff availability and employee earnings trends available.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Billings
65 60 55 50 45 40 Permanent Placements 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
3 Vacancies
Key points from the June survey:
4 Sectoral demand
Brexit concerns hit recruitment activity in June
5 Staff availability
Pay growth slows further
6 Pay pressures
Candidate availability continues to deteriorate
7 Special feature Commenting on the latest survey results, REC chief executive Kevin Green says: “Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects. Markit Henley on Thames Oxon RG9 1HG, UK Tel: +44 1491 461000 Fax: +44 1491 461001 email: [email protected] Copies of the report are available on annual subscription from Markit. For subscription details please contact: [email protected]
“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like. “We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU. “Before the referendum, businesses were already finding it increasingly hard to source the right candidates. Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”
Report on Jobs | Recruitment Industry Survey
1
Executive summary
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. The main findings for June are:
Drop in permanent placements...
The number of people placed in permanent positions fell in June. Although slight, it was the first decline in 45 months. Anecdotal evidence suggested that uncertainty in the lead-up to the EU referendum (data were collected between 13-24 June) had heavily impacted on activity.
...while temp billings rise at slower rate
Although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low. Brexit uncertainties were frequently cited by survey respondents.
Pay growth continues to ease
June data pointed to a further easing of permanent salary growth. The latest increase was the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.
Further drop in candidate availability
The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.
Staff Appointments 50 = no change on previous month 70
50=no change on previous month 70
Temp/Contract Billings
65
65
60
60
55
55
50
50
45
45
40
40
35
35
Permanent Placements
30
30
25
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Demand for staff 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45 40
Permanent Vacancies
35 30 Increasing rate of decline
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Staff Availability and Earnings Growth 50 = no change on previous month 70 65
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
40
60
50
55
60
50
70
45 40
Average permanent salaries (LHS)
35
80 90
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
All Intellectual Property Rights owned by Markit
30
Report on Jobs | Recruitment Industry Survey
2
Staff appointments
Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
60 55
Permanent placements fall for first time since September 2012
50 45
The number of people placed in permanent jobs decreased in June. Although marginal, it was the first drop in 45 months. Heightened uncertainty in the run-up to the UK’s EU referendum was widely reported by panellists, with many clients holding off on decisions. London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.
Agencies’ billings from the employment of temporary/contract staff rose further in June. However, the rate of growth eased to the slowest in nine months. As was the case for permanent appointments, Brexit uncertainty was commonly cited by panel members in the latest month. Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland. An index reading above 50 signals a higher number of placements/billings than the previous month. Readings below 50 signal a decline compared with the previous month.
Temp/Contract Billings
65
Recruitment consultants indicated a slight drop in permanent staff placements during June, while temporary/contract staff billings rose at a slower pace.
Weaker rise in temp billings
Increasing rate of growth
40 35
Permanent Placements
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Jan 42.7 Feb 44.8 Mar 37.7 Apr 38.1 May 37.1 Jun 33.4
28.4 29.3 35.9 34.1 31.5 34.7
28.9 25.9 26.3 27.8 31.4 31.8
13.7 18.8 11.4 10.4 5.7 1.6
Index S.Adj. 50 = no chg Index
56.9 59.4 55.7 55.2 52.9 50.8
56.0 56.6 53.7 53.4 52.9 49.3
Temporary/Contract Staff Billings Q. Please compare your billings received from the employment of temporary and contract staff with the situation one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Jan 20.3 Feb 32.5 Mar 38.6 Apr 34.9 May 35.3 Jun 32.3
40.7 44.6 46.8 43.7 42.3 46.3
39.0 22.9 14.6 21.4 22.4 21.4
-18.7 9.5 24.0 13.4 12.9 10.9
Index S.Adj. 50 = no chg Index
40.7 54.8 62.0 56.7 56.5 55.4
54.4 54.4 56.4 59.1 56.4 52.3
Report on Jobs | Recruitment Industry Survey
3
Vacancies
Recruitment consultants are asked to specify whether the demand for staff from employers has changed on the previous month, thereby providing an indicator of the number of job vacancies. The summary indexes shown in this page are derived from the detailed sector data shown on page 5.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Slowest vacancy growth in over three years
Dropping to 57.9 in June, from 59.4 in May, the Report on Jobs Vacancy Index signalled that the rate of expansion in demand for staff eased to a 37-month low. Slower increases in demand were signalled for both permanent and temporary staff in the latest survey period.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65
Public & private sector vacancies
60
Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.
55
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35 30
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 2.3% on an annual basis in the three months to May. That was the fastest growth since the three months to February. Internet-based recruitment spending fell -6.7% on a yearon-year basis in the final quarter of 2015. This was the first drop since the third quarter of 2012. Moreover, the rate of decline was the sharpest in six years. The Job Vacancies Index monitors the overall demand for staff at recruitment consultancies. An index reading above 50 signals a higher number of vacancies than the previous month. Readings below 50 signal a decline compared with the previous month.
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Job Vacancy Indicators
Feb’16
Mar
Apr
May
Jun
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
62.3 62.4 60.0
59.9 60.1 57.5
59.1 59.2 58.0
59.4 59.4 59.4
57.9 57.9 58.2
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
47.0 51.1 67.2 58.8
48.6 53.8 66.2 60.6
48.7 50.7 60.9 60.1
50.7 52.0 62.0 61.9
50.4 53.0 58.6 63.2
Job centre vacancies 3.6 Internet recruitment -6.7
1.9 --
2.0 --
2.3 --
n/a --
Other key vacancy data Annual % change
Sources: Job centre vacancies provided by ONS via EcoWin.
Internet recruitment spending provided by WARC.com
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Report on Jobs | Recruitment Industry Survey
4
Demand for staff by sector
Recruitment consultancies are requested to compare the demand for staff according to sector with the situation one month ago.
Demand for staff 50 = no change on previous month
90
Permanent staff
Engineering staff topped the ‘league table’ in June, recording the strongest growth of the nine monitored categories. In second place was Nursing/Medical/Care. Hotel & Catering staff on the other hand saw only a modest rise in demand. This year Rank Jun'16
Engineering* Nursing/Medical/Care Accounting/Financial IT & Computing Executive/Professional Construction* Secretarial/Clerical Blue Collar Hotel & Catering
1 2 3 4 5 6 7 8 9
61.4 60.0 59.1 58.0 57.1 56.6 56.4 55.6 51.5
(Last year) Rank Jun'15
(2) (1) (5) (4) (3) (8) (6) (7) (9)
(68.4) (70.3) (65.0) (65.4) (66.4) (58.6) (63.3) (59.2) (56.8)
Nursing/Medical/Care Hotel & Catering Secretarial/Clerical Construction* Blue Collar Engineering* Accounting/Financial IT & Computing Executive/Professional
his year T Rank Jun'16
1 2 3 4 5 6 7 8 9
67.4 62.3 59.7 58.9 58.8 57.9 56.8 52.8 51.4
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Jun'15
(1) (9) (3) (6) (4) (2) (5) (7) (8)
(68.7) (58.3) (61.9) (61.0) (61.5) (64.8) (61.1) (60.6) (58.8)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
50 T em p
40 30
30 20
2002 2004 2006 2008 2010 2012 2014
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014
Hotel & Catering
80
70
T em p
70
T em p
60
60 50
50 P erm
40
30
30
20
20
2002 2004 2006 2008 2010 2012 2014
90
Nursing/Medical/Care 90
80
80 T em p
70
60
50
50 P erm
40
P erm
2002 2004 2006 2008 2010 2012 2014
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014
20 2013
90
T em p
P erm
40
Construction P erm
80 70
Data are presented in the form of diffusion indices whereby a reading of 50 indicates no change on the previous month. Readings above 50 signal stronger demand than a month ago. Readings below 50 signal weaker demand than a month ago.
IT & Computing
60
50
20
2002 2004 2006 2008 2010 2012 2014
70
60
40
T em p
40
30
20
P erm
60
80
Nursing/Medical/Care workers saw comfortably the sharpest rise in vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/Professional staff.
P erm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
90
Secretarial & Clerical
80
60 50
T em p
40 30 20 2013
2014
2015
2014
2015
Report on Jobs | Recruitment Industry Survey
5
Staff availability
Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month. An overall indicator of staff availability is also calculated.
Staff Availability 50 = no change on previous month
Improving availability
90 80
Availability of permanent staff
Staff Availability Index
70
The availability of candidates to fill permanent roles fell further in June. Moreover, the rate of deterioration accelerated since May and was marked overall. Around 33% of panellists reported lower permanent staff availability, compared with just under 10% that noted a rise. The sharpest fall in permanent candidate availability was seen in the Midlands, while London registered the weakest decline.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
Short-term staff saw a further deterioration in demand for their services during June. That said, the latest fall in temp availability was the least marked in 33 months. The Midlands saw the sharpest drop in temp availability. In contrast, Scotland posted a slight improvement.
60 50 40 Temp Availability
Permanent Availability
Deteriorating availability
30 20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Availability of permanent staff
Key permanent staff skills reported in short supply:* Accountancy/Financial: Audit, Compliance, Financial Planners, Paralegals, Paraplanners, Sales, Tax Accountants. Blue Collar: Fork Lift Drivers. Construction: Estimators, Project Managers, Quantity Surveyors. Engineering: Architectural Technicians, Design Engineers, Manufacturing Engineers, Process Engineers, Rail. Nursing/Medical/Care: Care Assistants, Care Workers, Home Carers, Nurses. Other: Chefs, Teachers, Telesales.
Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
*consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
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Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Jan 25.5 Feb 15.5 Mar 9.1 Apr 12.4 May 10.9 Jun 9.7
48.5 55.7 58.9 58.7 59.0 57.8
26.0 28.8 32.1 28.9 30.1 32.5
-0.5 -13.4 -23.0 -16.5 -19.2 -22.8
49.7 43.3 38.5 41.7 40.4 38.6
38.9 40.2 39.9 40.9 41.5 40.7
Availability of temporary/contract staff
Key temp skills reported in short supply:* Accountancy/Financial: Sales Negotiators. Blue Collar: Forklift Drivers, LGV Drivers, Welders. Construction: Bricklayers, Designers, Plumbers, Scaffolders. Executive/ Professional: Quality Roles. Engineering: Electrical Engineers, Production, Maintenance. IT/Computing: Web Developers. Nursing/Medical/Care: Care Workers, Home Carers, Nurses. Secretarial/Clerical: Admin. Other: Call Centre, Customer Service, Teachers.
Better %
Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Jan 22.2 Feb 16.4 Mar 15.4 Apr 13.5 May 12.0 Jun 16.3
55.4 61.7 58.8 63.1 64.6 59.1
22.4 21.9 25.9 23.4 23.3 24.6
-0.2 -5.6 -10.5 -9.9 -11.3 -8.3
49.9 47.2 44.7 45.1 44.3 45.8
40.0 42.3 45.0 45.7 46.0 46.5
Report on Jobs | Recruitment Industry Survey
6
Pay pressures
The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.
Pay Pressures 50 = no change on previous month 70 65
Permanent salaries
Average starting salaries for candidates placed in permanent jobs increased further during June. However, the rate of growth eased to a 33-month low. Those panellists reporting a rise in salaries generally attributed this to competition for candidates with scarce skill sets. The Midlands posted the fastest rise in permanent salaries and a slightly sharper increase than in May. Elsewhere, salary growth eased.
60 55 50 45
Temp/contract pay rates
40
Hourly rates of pay for staff in temporary/contract employment rose further during June. That said, the latest increase was the least marked in three months. The impact of the National Living Wage was again reported as a factor contributing to higher temp pay. Weaker increases in temp pay were reported in the Midlands, South, North and Scotland. Only London saw an acceleration, but still the joint-slowest rise overall.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
Yr/yr % chg in average weekly earnings (3mma) 2013
2014 Jan'16
Feb
Mar
Apr
Whole economy 1.4
1.2
1.2
2.2
1.9
2.0
2.0
Private sector
1.4
1.4
1.4
2.4
2.0
2.2
2.1
Public sector
1.6
0.9
0.3
1.3
1.3
1.6
1.7
Services
1.4
1.1
1.0
2.0
1.6
1.7
1.6
Manufacturing 1.8
2.3
2.2
1.6
1.7
1.7
1.6
Construction
0.3
0.9
7.2
8.1
8.3
8.4
1.0
9 Public sector 6
3
0 Private sector -3
-6 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2015 Dec 20.6 2016 Jan 19.4 Feb 22.9 Mar 24.5 Apr 26.0 May 22.0 Jun 17.3
73.1 75.3 72.2 70.9 68.8 74.2 78.9
6.3 5.3 5.0 4.5 5.2 3.8 3.7
14.3 14.1 17.9 20.0 20.8 18.2 13.6
57.2 57.0 59.0 60.0 60.4 59.1 56.8
58.7 58.5 59.3 59.9 59.1 58.2 56.8
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
Annual percent change
2001
Increasing rate of decline
Permanent Salaries
Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) remained at 2.0% in the three months to April 2016. Private sector workers continued to see faster earnings growth than those in the public sector. Construction sector earnings were up 8.4%, the strongest growth since October 2001.
2012
Temp/Contract Hourly Pay Rates
35
UK average weekly earnings
Increasing rate of growth
Permanent Salaries
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2015 Dec 12.1 2016 Jan 13.4 Feb 11.1 Mar 16.1 Apr 24.3 May 19.7 Jun 15.7
82.3 79.0 82.7 79.5 71.6 75.4 77.9
5.6 7.6 6.1 4.4 4.1 5.0 6.4
6.5 5.8 5.0 11.7 20.2 14.7 9.4
53.2 52.9 52.5 55.9 60.1 57.3 54.7
55.3 54.2 52.8 55.1 60.5 58.2 55.5
Report on Jobs | Recruitment Industry Survey
7
Feature Pay reviews by sector
Pay reviews remain generally subdued but sectoral variation evident UK pay reviews have led to disappointingly weak increases in pre-tax salaries during 2016. Survey data collected in the four months to June signal an average annual rise of just 1.4%. While this is higher than the 1.0% increase indicated in 2015, it is slightly below the 1.5% rate seen in 2014. However, the representative survey of 4,000 British households, compiled by Markit using data collected by Ipsos MORI, signalled varying fortunes by sector. Manufacturing sector workers saw the strongest uplift to pay, with a 2.0% rise. Close behind was Media/Culture/Entertainment with a 1.9% increase, followed by Construction and IT/Telecoms (both 1.8%).
UK pay reviews M anufac turing M edia/Culture/E ntertainm ent Cons truc tion IT/Telec om s Financ e/B us ines s s ervic es Retail O ther s ervic es Utilities /E nergy /Trans port E duc ation/Health/S oc ial 0
0.5
1
1.5
The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry. Find out more on www.rec.uk.com.
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2.5
Source: Markit.
At the other end of the scale, Education/Health/Social services workers saw a rise of just 0.9%. The Utilities/Energy/Transport category posted the second-weakest increase, at 1.1%.
2
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by Markit from a panel of 400 UK recruitment and employment consultancies. In 2014/15, 1,197,928 people were employed in either temporary of contract work through consultancies and 633,992 people were placed in permanent positions through consultancies. Monthly survey data were first collected in October 1997 and are collected in the end of each month, with respondents asked to specify the direction of change in a number of survey variables. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. The intellectual property rights to these data are owned by or licensed to Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of Markit Economics Limited’s intellectual property rights. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.
