UK Labour Market - Change Recruitment Group
UK Labour Market
November 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent placements and temporary billings both see stronger growth The Report on Jobs is a monthly publication produced by IHS 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 2016
3 Vacancies
Key points from the October survey:
4 Sectoral demand
Permanent placements growth reaches eight-month high as temp billings also rise at faster pace
5 Staff availability
Demand for both permanent and temporary candidates at its highest since May
6 Pay pressures
Agencies report steeper decline in staff availability
7 Special feature
Commenting on the latest survey results, REC Chief Executive Kevin Green says: “Despite ongoing uncertainty the UK jobs market is thriving again in most areas of the UK. Job vacancies are back to levels not seen since April, and for the third consecutive month recruiters have reported an increase in the amount of people finding permanent jobs.
IHS 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 IHS Markit. For subscription details please contact: [email protected]
“This is a great place to be but there are real threats coming over the hill. Candidate availability has been falling for three and a half years. There are more vacancies than there are people to fill them in many sectors, including engineering, construction and healthcare. “The government urgently needs to outline a strategy to address employability skills within UK education and promote apprenticeships and other routes into work. We also need immigration policies that reflect immediate labour market needs. Imposing new restrictions on people coming from abroad to fill vacancies will impact businesses’ ability to meet demand as well as the delivery of public services. “We need Britain to remain open for business. We can’t afford to see businesses relocate overseas, taking jobs with them and leaving us poorer as a nation.”
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 October are:
Permanent and temporary placements rise solidly...
The amount of people placed in permanent roles increased for the third month running in October. Moreover, the rate of expansion quickened to the steepest recorded in eight months. Temporary/contract staff placements also rose at a faster pace at the start of the fourth quarter, with the rate of growth accelerating to a five-month high.
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 2016
Demand for staff
...as demand for staff improves further
The robust increase in staff appointments was supported by increased employee vacancies in the latest survey period. Furthermore, demand for both permanent and temporary staff was at the highest since May.
50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45
Stronger increase in salaries
Permanent staff starting salaries rose further in October, with the rate of increase picking up to its strongest for five months. Growth in hourly pay rates for temporary/contract staff meanwhile quickened slightly from September’s 40-month low, but remained relatively modest overall.
Further drop in candidate availability
The availability of permanent candidates continued to decline in October, and at a steeper rate than in September. Meanwhile, the availability of temporary/contract staff fell at the softest rate in four months.
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 2016
All Intellectual Property Rights owned by IHS 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
Increasing rate of growth
Temp/Contract Billings
65
Survey data for October signalled faster increases in both permanent and temporary/contract billings.
60 55
Quickest rise in permanent placements since February
50
The volume of permanent placements made by recruitment agencies increased for the third month in a row in October. Notably, the rate of growth quickened to a sharp pace that was the fastest seen in eight months. Around 40% of survey respondents reported an increase in placements, compared to 29% that saw a fall. Agencies reported that improved demand and new clients had boosted the number of people placed in permanent roles in the latest survey period. The North saw the quickest increase in permanent placements at the start of the fourth quarter, followed by the Midlands. However, London and Scotland registered marginal declines.
45
Temp billings increase at stronger rate
Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Billings received by agencies from the employment of temporary/contract staff increased in October, thereby extending the current trend to three-and-a-half years. Moreover, the rate of expansion strengthened to a five-month record. As was the case with permanent placements, the North saw the strongest increase in short-term staff billings in October. The only region monitored by the survey to see a fall in temporary billings was 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.
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 2016
Permanent Staff Placements
Higher %
Same %
Lower %
Net +/-
2016 May 37.1 Jun 33.4 Jul 28.1 Aug 32.5 Sep 38.0 Oct 39.5
31.5 34.7 34.0 33.7 31.3 31.9
31.4 31.8 37.9 33.8 30.7 28.6
5.7 1.6 -9.8 -1.3 7.3 10.9
Index S.Adj. 50 = no chg Index
52.9 50.8 45.1 49.3 53.6 55.5
52.9 49.3 45.4 51.1 51.0 54.6
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 May 35.3 Jun 32.3 Jul 34.3 Aug 35.7 Sep 33.9 Oct 34.6
42.3 46.3 41.1 40.2 42.3 45.5
22.4 21.4 24.7 24.2 23.8 19.9
12.9 10.9 9.6 11.5 10.1 14.7
Index S.Adj. 50 = no chg Index
56.5 55.4 54.8 55.7 55.1 57.3
56.4 52.3 51.6 54.5 52.6 55.2
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
Vacancies rise at faster rate
October signalled a further increase in demand for staff, with the Jobs Vacancy Index rising from 56.9 in September to a five-month high of 59.4 in October. Latest data also indicated, for the first time since March, growth in permanent staff vacancies outstripping that for temporary roles. However, demand for both job types increased markedly since the previous month.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65 60
Public & private sector vacancies
55
Demand for private sector staff remained robust in October, with recruitment consultancies seeing sharp increases in vacancies for both permanent and temporary posts. In contrast, the number of available permanent and temporary roles in the public sector declined modestly in the latest survey period.
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35 30 25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) indicated that vacancies rose 1.4% on an annual basis in the three months to August. This was the strongest increase seen since the three months to May. Meanwhile, internet-based recruitment spending continued to fall on an annual basis in Q2 2016. The -7.2% year-on-year decline over the second quarter marked the third successive quarterly drop in expenditure. 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.
Job Vacancy Indicators
Jun’16
Jul
Aug
Sep
Oct
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
58.1 58.1 58.2
55.6 55.6 56.7
55.5 55.4 57.0
56.9 56.8 58.0
59.4 59.4 58.7
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
50.4 53.0 58.6 63.2
51.8 50.4 56.5 58.3
48.7 51.5 57.1 58.4
47.0 53.0 61.6 61.9
47.9 48.1 64.3 61.8
Job centre vacancies 2.0 Internet recruitment -7.2
0.8 --
1.1 --
1.4 --
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 IHS 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
Demand rose for all permanent staff categories during October, albeit to varying degrees. Engineering maintained its top spot in the table, followed by IT & Computing. Meanwhile, demand was weakest for permanent roles in Hotel & Catering. This year Rank Oct'16
Engineering* IT & Computing Executive/Professional Construction* Nursing/Medical/Care Secretarial/Clerical Accounting/Financial Blue Collar Hotel & Catering
1 2 3 4 5 6 7 8 9
65.7 61.9 58.7 58.4 58.3 57.9 57.8 55.3 50.6
(Last year) Rank Oct'15
(6) (3) (4) (5) (2) (7) (1) (9) (8)
(62.6) (64.0) (63.3) (62.8) (64.8) (61.7) (65.9) (54.4) (55.0)
Blue Collar Secretarial/Clerical Engineering* Nursing/Medical/Care Hotel & Catering IT & Computing Construction* Accounting/Financial Executive/Professional
his year T Rank Oct'16
1 2 3 4 5 6 7 8 9
62.2 60.1 59.5 59.3 57.8 56.3 54.8 54.5 51.7
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Oct'15
(7) (3) (6) (1) (2) (5) (8) (4) (9)
(59.4) (60.1) (59.6) (64.2) (60.6) (59.6) (55.5) (59.9) (54.2)
*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 2016
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014 2016
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 2016
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 2016
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014 2016
20 2013
90 80
T em p
P erm
40
Construction P erm
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 2016
70
60
40
T em p
40
30
20
P erm
60
80
Blue Collar topped the table for temporary/contract staff demand in October. All other categories also saw an upturn in demand over the month, though Executive/Professional saw the slowest rate of growth.
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
2016
2014
2015
2016
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
Permanent staff availability deteriorated during October, thereby extending the current trend to three-and-a-half years. Furthermore, the rate of reduction was sharper than seen in the previous month. Around 28% of panellists reported a decline in permanent staff availability, compared to 11% that registered an improvement. Lower permanent candidate availability was seen across all monitored regions, with the Midlands recording the fastest rate of decline.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
The availability of temporary/contract staff meanwhile declined at a softer pace in October. Though solid overall, the latest drop was the slowest seen for four months. As was the case with permanent staff, the Midlands noted the fastest reduction in short-term staff availability. Contrary to the overall trend, Scotland saw a modest improvement.
60 50 40 Temp Availability
Permanent Availability
30
Deteriorating availability
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
Key permanent staff skills reported in short supply:*
Accountancy/Financial: Accountants, Audit, Compliance, Credit Control, Risk. Blue Collar: HGV Drivers, Tool Makers. Construction: Engineers, Quantity Surveyors. Engineering: Automotive Engineers, Design Engineers. IT/Computing: C#, Games, Java, Security, SQL. Nursing/ Medical/Care: Care Workers. Other: Commercial Analysts, Marketing, Pharmaceuticals, Project Managers, Sales, Scientists.
*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 May 10.9 Jun 9.7 Jul 11.7 Aug 10.3 Sep 15.2 Oct 11.2
59.0 57.8 53.1 49.2 56.5 60.5
30.1 32.5 35.2 40.5 28.3 28.3
-19.2 -22.8 -23.5 -30.2 -13.1 -17.2
40.4 38.6 38.2 34.9 43.5 41.4
41.5 40.7 42.3 40.5 42.6 40.9
Availability of temporary/contract staff Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Key temp skills reported in short supply:* Accountancy/Financial: Audit, Compliance, Risk. Blue Collar: Bricklayers, Labourers, LGV Drivers, Painters, Warehouse, Welders. Engineering: Design Engineers. IT/Computing: Developers, Digital. Nursing/Medical/ Care: Care Workers, Nurses. Secretarial/Clerical: Admin, Reception. Other: Call Centre, Catering, Customer Service, Pharmaceuticals, Scientists, Pharmaceuticals, Telesales.
Better %
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 May 12.0 Jun 16.3 Jul 10.6 Aug 12.3 Sep 16.6 Oct 14.4
64.6 59.1 61.2 53.4 53.5 58.9
23.3 24.6 28.2 34.2 30.0 26.7
-11.3 -8.3 -17.6 -21.9 -13.4 -12.3
44.3 45.8 41.2 39.0 43.3 43.9
46.0 46.5 43.6 42.3 44.6 45.5
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
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
October survey data signalled a further rise in starting salaries for successful permanent candidates. Notably, the rate of wage inflation quickened from the previous month to its strongest since May. Anecdotal evidence indicated increased demand for staff and a lack of suitably qualified candidates. The North saw the sharpest rise in salaries, though rates of growth were nonetheless marked elsewhere.
60 55 50 45
Temp/contract pay rates
Hourly rates of pay for staff in temporary/contract roles continued to increase at the start of the fourth quarter. The rate of growth remained moderate though, despite picking up slightly from September’s 40-month low. A number of panellists mentioned that tighter client budgets had dampened pay inflation. Agencies based in the Midlands saw the fastest increase in temp pay, while London and Scotland reported the slowest rates of growth.
40
Temp/Contract Hourly Pay Rates Increasing rate of decline
35
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Permanent Salaries Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
UK average weekly earnings Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) eased to 2.3% in the three months to July 2016. Pay growth eased in both the private and public sectors.
Yr/yr % chg in average weekly earnings (3mma) 2013
2014
2015 Apr'16
May
Jun
Jul
Whole economy 1.2
1.2
2.5
2.0
2.3
2.5
2.3
Private sector
1.4
1.4
2.8
2.1
2.6
2.6
2.4
Public sector
0.9
0.3
0.9
1.7
1.7
1.7
1.6
Services
1.1
1.0
2.6
1.6
2.0
2.2
2.1
Manufacturing 2.3
2.2
1.3
1.7
2.2
2.3
2.6
Construction
0.9
4.3
8.2
8.2
8.6
6.5
0.3
9 Public sector 6
3
0 Private sector -3
-6 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Apr 26.0 May 22.0 Jun 17.3 Jul 13.4 Aug 17.8 Sep 16.9 Oct 18.4
68.8 74.2 78.9 80.4 76.3 78.0 77.9
5.2 3.8 3.7 6.2 5.9 5.1 3.7
20.8 18.2 13.6 7.3 11.8 11.8 14.7
60.4 59.1 56.8 53.6 55.9 55.9 57.3
59.1 58.2 56.8 52.8 55.7 55.4 57.6
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
Higher %
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Apr 24.3 May 19.7 Jun 15.7 Jul 12.7 Aug 12.1 Sep 10.8 Oct 15.8
71.6 75.4 77.9 82.5 83.9 82.4 78.9
4.1 5.0 6.4 4.8 4.0 6.8 5.3
20.2 14.7 9.4 7.8 8.0 4.0 10.5
60.1 57.3 54.7 53.9 54.0 52.0 55.3
60.5 58.2 55.5 54.2 54.2 52.2 52.6
Report on Jobs | Recruitment Industry Survey
7
Feature Regional unemployment
Latest labour market data from the Office for National Statistics (ONS) indicated that 776,400 people were claiming out-of-work benefits in September. This was an increase of only 700 from the previous month, with August seeing an upwardly revised rise of 7,100. As a result, the claimant count rate was unchanged from August’s nine-month high of 2.3% at the end of Q3. The lowest regional claimant count was recorded in the South East of England at 1.3%, where the rate has been unchanged since May, followed closely by the South West at 1.4%. The North East register the highest claimant count rate of all 12 UK regions for the third successive month. This was despite the figure edging down from 4.2% in August to 4.1% in September.
Region
Claimant count (Sep ’16)
‘000s
Rate (%)*
Rank
1.3 1.4 1.5 1.8 2.0 2.8 2.9 2.9 2.9 2.9 3.9 4.1 2.3
(1) (2) (3) (4) (5) (6) (7) (7) (7) (7) (11) (12)
South East 62 South West 41 East 47 London 103 East Midlands 46 NW & Merseyside 106 Yorks & Humberside 77 Scotland 82 Wales 43 West Midlands 85 Northern Ireland 35 North East 50 United Kingdom 776
Source: Department for Work & Pensions and National Statistics. * As a percentage of Claimant Count + Workforce Jobs.
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.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise to forge solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. Website: ihsmarkit.com
All Intellectual Property Rights owned by IHS Markit
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by IHS 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. IHS 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 IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of IHS Markit Economics Limited’s intellectual property rights. IHS 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 IHS 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. IHS Markit is a registered trade mark of IHS Markit Limited.
November 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent placements and temporary billings both see stronger growth The Report on Jobs is a monthly publication produced by IHS 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 2016
3 Vacancies
Key points from the October survey:
4 Sectoral demand
Permanent placements growth reaches eight-month high as temp billings also rise at faster pace
5 Staff availability
Demand for both permanent and temporary candidates at its highest since May
6 Pay pressures
Agencies report steeper decline in staff availability
7 Special feature
Commenting on the latest survey results, REC Chief Executive Kevin Green says: “Despite ongoing uncertainty the UK jobs market is thriving again in most areas of the UK. Job vacancies are back to levels not seen since April, and for the third consecutive month recruiters have reported an increase in the amount of people finding permanent jobs.
IHS 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 IHS Markit. For subscription details please contact: [email protected]
“This is a great place to be but there are real threats coming over the hill. Candidate availability has been falling for three and a half years. There are more vacancies than there are people to fill them in many sectors, including engineering, construction and healthcare. “The government urgently needs to outline a strategy to address employability skills within UK education and promote apprenticeships and other routes into work. We also need immigration policies that reflect immediate labour market needs. Imposing new restrictions on people coming from abroad to fill vacancies will impact businesses’ ability to meet demand as well as the delivery of public services. “We need Britain to remain open for business. We can’t afford to see businesses relocate overseas, taking jobs with them and leaving us poorer as a nation.”
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 October are:
Permanent and temporary placements rise solidly...
The amount of people placed in permanent roles increased for the third month running in October. Moreover, the rate of expansion quickened to the steepest recorded in eight months. Temporary/contract staff placements also rose at a faster pace at the start of the fourth quarter, with the rate of growth accelerating to a five-month high.
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 2016
Demand for staff
...as demand for staff improves further
The robust increase in staff appointments was supported by increased employee vacancies in the latest survey period. Furthermore, demand for both permanent and temporary staff was at the highest since May.
50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45
Stronger increase in salaries
Permanent staff starting salaries rose further in October, with the rate of increase picking up to its strongest for five months. Growth in hourly pay rates for temporary/contract staff meanwhile quickened slightly from September’s 40-month low, but remained relatively modest overall.
Further drop in candidate availability
The availability of permanent candidates continued to decline in October, and at a steeper rate than in September. Meanwhile, the availability of temporary/contract staff fell at the softest rate in four months.
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 2016
All Intellectual Property Rights owned by IHS 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
Increasing rate of growth
Temp/Contract Billings
65
Survey data for October signalled faster increases in both permanent and temporary/contract billings.
60 55
Quickest rise in permanent placements since February
50
The volume of permanent placements made by recruitment agencies increased for the third month in a row in October. Notably, the rate of growth quickened to a sharp pace that was the fastest seen in eight months. Around 40% of survey respondents reported an increase in placements, compared to 29% that saw a fall. Agencies reported that improved demand and new clients had boosted the number of people placed in permanent roles in the latest survey period. The North saw the quickest increase in permanent placements at the start of the fourth quarter, followed by the Midlands. However, London and Scotland registered marginal declines.
45
Temp billings increase at stronger rate
Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Billings received by agencies from the employment of temporary/contract staff increased in October, thereby extending the current trend to three-and-a-half years. Moreover, the rate of expansion strengthened to a five-month record. As was the case with permanent placements, the North saw the strongest increase in short-term staff billings in October. The only region monitored by the survey to see a fall in temporary billings was 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.
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 2016
Permanent Staff Placements
Higher %
Same %
Lower %
Net +/-
2016 May 37.1 Jun 33.4 Jul 28.1 Aug 32.5 Sep 38.0 Oct 39.5
31.5 34.7 34.0 33.7 31.3 31.9
31.4 31.8 37.9 33.8 30.7 28.6
5.7 1.6 -9.8 -1.3 7.3 10.9
Index S.Adj. 50 = no chg Index
52.9 50.8 45.1 49.3 53.6 55.5
52.9 49.3 45.4 51.1 51.0 54.6
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 May 35.3 Jun 32.3 Jul 34.3 Aug 35.7 Sep 33.9 Oct 34.6
42.3 46.3 41.1 40.2 42.3 45.5
22.4 21.4 24.7 24.2 23.8 19.9
12.9 10.9 9.6 11.5 10.1 14.7
Index S.Adj. 50 = no chg Index
56.5 55.4 54.8 55.7 55.1 57.3
56.4 52.3 51.6 54.5 52.6 55.2
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
Vacancies rise at faster rate
October signalled a further increase in demand for staff, with the Jobs Vacancy Index rising from 56.9 in September to a five-month high of 59.4 in October. Latest data also indicated, for the first time since March, growth in permanent staff vacancies outstripping that for temporary roles. However, demand for both job types increased markedly since the previous month.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65 60
Public & private sector vacancies
55
Demand for private sector staff remained robust in October, with recruitment consultancies seeing sharp increases in vacancies for both permanent and temporary posts. In contrast, the number of available permanent and temporary roles in the public sector declined modestly in the latest survey period.
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35 30 25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) indicated that vacancies rose 1.4% on an annual basis in the three months to August. This was the strongest increase seen since the three months to May. Meanwhile, internet-based recruitment spending continued to fall on an annual basis in Q2 2016. The -7.2% year-on-year decline over the second quarter marked the third successive quarterly drop in expenditure. 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.
Job Vacancy Indicators
Jun’16
Jul
Aug
Sep
Oct
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
58.1 58.1 58.2
55.6 55.6 56.7
55.5 55.4 57.0
56.9 56.8 58.0
59.4 59.4 58.7
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
50.4 53.0 58.6 63.2
51.8 50.4 56.5 58.3
48.7 51.5 57.1 58.4
47.0 53.0 61.6 61.9
47.9 48.1 64.3 61.8
Job centre vacancies 2.0 Internet recruitment -7.2
0.8 --
1.1 --
1.4 --
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
Demand rose for all permanent staff categories during October, albeit to varying degrees. Engineering maintained its top spot in the table, followed by IT & Computing. Meanwhile, demand was weakest for permanent roles in Hotel & Catering. This year Rank Oct'16
Engineering* IT & Computing Executive/Professional Construction* Nursing/Medical/Care Secretarial/Clerical Accounting/Financial Blue Collar Hotel & Catering
1 2 3 4 5 6 7 8 9
65.7 61.9 58.7 58.4 58.3 57.9 57.8 55.3 50.6
(Last year) Rank Oct'15
(6) (3) (4) (5) (2) (7) (1) (9) (8)
(62.6) (64.0) (63.3) (62.8) (64.8) (61.7) (65.9) (54.4) (55.0)
Blue Collar Secretarial/Clerical Engineering* Nursing/Medical/Care Hotel & Catering IT & Computing Construction* Accounting/Financial Executive/Professional
his year T Rank Oct'16
1 2 3 4 5 6 7 8 9
62.2 60.1 59.5 59.3 57.8 56.3 54.8 54.5 51.7
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Oct'15
(7) (3) (6) (1) (2) (5) (8) (4) (9)
(59.4) (60.1) (59.6) (64.2) (60.6) (59.6) (55.5) (59.9) (54.2)
*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 2016
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014 2016
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 2016
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 2016
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014 2016
20 2013
90 80
T em p
P erm
40
Construction P erm
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 2016
70
60
40
T em p
40
30
20
P erm
60
80
Blue Collar topped the table for temporary/contract staff demand in October. All other categories also saw an upturn in demand over the month, though Executive/Professional saw the slowest rate of growth.
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
2016
2014
2015
2016
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
Permanent staff availability deteriorated during October, thereby extending the current trend to three-and-a-half years. Furthermore, the rate of reduction was sharper than seen in the previous month. Around 28% of panellists reported a decline in permanent staff availability, compared to 11% that registered an improvement. Lower permanent candidate availability was seen across all monitored regions, with the Midlands recording the fastest rate of decline.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
The availability of temporary/contract staff meanwhile declined at a softer pace in October. Though solid overall, the latest drop was the slowest seen for four months. As was the case with permanent staff, the Midlands noted the fastest reduction in short-term staff availability. Contrary to the overall trend, Scotland saw a modest improvement.
60 50 40 Temp Availability
Permanent Availability
30
Deteriorating availability
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
Key permanent staff skills reported in short supply:*
Accountancy/Financial: Accountants, Audit, Compliance, Credit Control, Risk. Blue Collar: HGV Drivers, Tool Makers. Construction: Engineers, Quantity Surveyors. Engineering: Automotive Engineers, Design Engineers. IT/Computing: C#, Games, Java, Security, SQL. Nursing/ Medical/Care: Care Workers. Other: Commercial Analysts, Marketing, Pharmaceuticals, Project Managers, Sales, Scientists.
*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 May 10.9 Jun 9.7 Jul 11.7 Aug 10.3 Sep 15.2 Oct 11.2
59.0 57.8 53.1 49.2 56.5 60.5
30.1 32.5 35.2 40.5 28.3 28.3
-19.2 -22.8 -23.5 -30.2 -13.1 -17.2
40.4 38.6 38.2 34.9 43.5 41.4
41.5 40.7 42.3 40.5 42.6 40.9
Availability of temporary/contract staff Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Key temp skills reported in short supply:* Accountancy/Financial: Audit, Compliance, Risk. Blue Collar: Bricklayers, Labourers, LGV Drivers, Painters, Warehouse, Welders. Engineering: Design Engineers. IT/Computing: Developers, Digital. Nursing/Medical/ Care: Care Workers, Nurses. Secretarial/Clerical: Admin, Reception. Other: Call Centre, Catering, Customer Service, Pharmaceuticals, Scientists, Pharmaceuticals, Telesales.
Better %
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 May 12.0 Jun 16.3 Jul 10.6 Aug 12.3 Sep 16.6 Oct 14.4
64.6 59.1 61.2 53.4 53.5 58.9
23.3 24.6 28.2 34.2 30.0 26.7
-11.3 -8.3 -17.6 -21.9 -13.4 -12.3
44.3 45.8 41.2 39.0 43.3 43.9
46.0 46.5 43.6 42.3 44.6 45.5
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
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
October survey data signalled a further rise in starting salaries for successful permanent candidates. Notably, the rate of wage inflation quickened from the previous month to its strongest since May. Anecdotal evidence indicated increased demand for staff and a lack of suitably qualified candidates. The North saw the sharpest rise in salaries, though rates of growth were nonetheless marked elsewhere.
60 55 50 45
Temp/contract pay rates
Hourly rates of pay for staff in temporary/contract roles continued to increase at the start of the fourth quarter. The rate of growth remained moderate though, despite picking up slightly from September’s 40-month low. A number of panellists mentioned that tighter client budgets had dampened pay inflation. Agencies based in the Midlands saw the fastest increase in temp pay, while London and Scotland reported the slowest rates of growth.
40
Temp/Contract Hourly Pay Rates Increasing rate of decline
35
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Permanent Salaries Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
UK average weekly earnings Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) eased to 2.3% in the three months to July 2016. Pay growth eased in both the private and public sectors.
Yr/yr % chg in average weekly earnings (3mma) 2013
2014
2015 Apr'16
May
Jun
Jul
Whole economy 1.2
1.2
2.5
2.0
2.3
2.5
2.3
Private sector
1.4
1.4
2.8
2.1
2.6
2.6
2.4
Public sector
0.9
0.3
0.9
1.7
1.7
1.7
1.6
Services
1.1
1.0
2.6
1.6
2.0
2.2
2.1
Manufacturing 2.3
2.2
1.3
1.7
2.2
2.3
2.6
Construction
0.9
4.3
8.2
8.2
8.6
6.5
0.3
9 Public sector 6
3
0 Private sector -3
-6 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Apr 26.0 May 22.0 Jun 17.3 Jul 13.4 Aug 17.8 Sep 16.9 Oct 18.4
68.8 74.2 78.9 80.4 76.3 78.0 77.9
5.2 3.8 3.7 6.2 5.9 5.1 3.7
20.8 18.2 13.6 7.3 11.8 11.8 14.7
60.4 59.1 56.8 53.6 55.9 55.9 57.3
59.1 58.2 56.8 52.8 55.7 55.4 57.6
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
Higher %
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Apr 24.3 May 19.7 Jun 15.7 Jul 12.7 Aug 12.1 Sep 10.8 Oct 15.8
71.6 75.4 77.9 82.5 83.9 82.4 78.9
4.1 5.0 6.4 4.8 4.0 6.8 5.3
20.2 14.7 9.4 7.8 8.0 4.0 10.5
60.1 57.3 54.7 53.9 54.0 52.0 55.3
60.5 58.2 55.5 54.2 54.2 52.2 52.6
Report on Jobs | Recruitment Industry Survey
7
Feature Regional unemployment
Latest labour market data from the Office for National Statistics (ONS) indicated that 776,400 people were claiming out-of-work benefits in September. This was an increase of only 700 from the previous month, with August seeing an upwardly revised rise of 7,100. As a result, the claimant count rate was unchanged from August’s nine-month high of 2.3% at the end of Q3. The lowest regional claimant count was recorded in the South East of England at 1.3%, where the rate has been unchanged since May, followed closely by the South West at 1.4%. The North East register the highest claimant count rate of all 12 UK regions for the third successive month. This was despite the figure edging down from 4.2% in August to 4.1% in September.
Region
Claimant count (Sep ’16)
‘000s
Rate (%)*
Rank
1.3 1.4 1.5 1.8 2.0 2.8 2.9 2.9 2.9 2.9 3.9 4.1 2.3
(1) (2) (3) (4) (5) (6) (7) (7) (7) (7) (11) (12)
South East 62 South West 41 East 47 London 103 East Midlands 46 NW & Merseyside 106 Yorks & Humberside 77 Scotland 82 Wales 43 West Midlands 85 Northern Ireland 35 North East 50 United Kingdom 776
Source: Department for Work & Pensions and National Statistics. * As a percentage of Claimant Count + Workforce Jobs.
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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All Intellectual Property Rights owned by IHS Markit
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by IHS 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. IHS 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 IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of IHS Markit Economics Limited’s intellectual property rights. IHS 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 IHS 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. IHS Markit is a registered trade mark of IHS Markit Limited.
