UK Labour Market - Thomas Jeffrey
th
UK Labour Market
August 8 2017
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Staff appointments increase at fastest rate for over two years as candidate availability drops 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
Permanent Placements
40 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
3 Vacancies
Key points from the July survey:
4 Sectoral demand
Permanent placements growth reaches 27-month record
5 Staff availability
Temp billings increase at the fastest rate for nearly two-and-a-half years
6 Pay pressures 7 Special feature
2017
Marked decline in staff availability contributes to further increases in pay Commenting on the latest survey results, Kevin Green, REC Chief Executive says: “The jobs market continues to confound expectations with both permanent and temporary placements growing at the fastest rate for over two years. Starting salaries are also still rising, so for workers who want to boost their earnings now is a good time to consider moving job.
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]
“It’s clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks. UK employment remains at an all-time high and looks set to keep improving. The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home. Employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers. “London in particular is feeling the Brexit effect. Hiring is still growing but at a much slower rate compared with every other region of the UK. Financial services, a crucial part of the London labour market, are not hiring in their usual quantity as the uncertainty caused by Brexit makes them hesitant. “We can’t ignore the importance of our relationship with the EU to employers. If we want to keep our jobs market successful and vibrant, we must make it easier, not harder, for employers to access the people they need.”
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 July are:
Sharp growth in staff appointments
July survey data indicated that permanent placements increased to the greatest extent in 27 months. At the same time, growth in temp billings improved to a near two-and-a-half year 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 Permanent Placements
35
35
30
30
25
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Robust demand for staff
Recruitment agencies signalled a sustained and marked increase in demand for staff. Furthermore, overall demand for staff rose at its joint-strongest pace for 23 months (on par with May 2017).
Candidate availability continues to decline markedly...
Demand for staff 50 = no change on previous month 75 Temp/Contract Vacancies
65 60
The availability of both permanent and temporary workers continued to fall sharply during July. The rate of reduction eased for permanent staff, but the availability of temporary candidates declined at the quickest pace for just over a yearand-a-half.
55
...imparting further upward pressure on pay
30
Starting salaries for successful permanent candidates rose further in July, with the rate of inflation reaching a 20-month record. At the same time, hourly pay rates for short-term staff continued to increase sharply.
Increasing rate of growth
70
50 45 40 35
Permanent Vacancies Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Staff Availability and Earnings Growth 50 = no change on previous month
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
70 65
30 40
60
50
55
60
50 45
70
Average permanent salaries (LHS)
80
40 35
90 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
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. July survey data signals sharper growth in both permanent placements and temporary billings.
Permanent placements rise at quickest pace since April 2015
UK recruitments agencies signalled a sharp and accelerated increase in permanent placements at the start of the second half of the year. Furthermore, the number of people placed into permanent job roles rose at the quickest pace since April 2015. Anecdotal evidence indicated that growth reflected robust demand for staff at employers. The strongest upturn in permanent placements was recorded in the Midlands, closely followed by the North of England. The weakest increase was seen in London, where growth softened to an eight-month low.
Growth in temp billings accelerates to 29-month record
Agencies’ billings from the employment of temporary/contract workers continued to increase in July. Notably, the rate of expansion accelerated to the quickest seen for nearly two-anda-half years. A number of recruitment agencies indicated that companies took on extra short-term staff due to rising business requirements. All monitored regions saw sharp increases in temp billings during July, led by the North of England.
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.
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 Permanent Placements
40 35 30
Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago. Higher Same Lower Net Index S.Adj. % % % +/- 50 = no chg Index
2017 Feb 41.5 34.5 24.0 17.6 Mar 41.4 35.2 23.4 17.9 Apr 37.8 37.2 25.0 12.8 May 42.6 32.9 24.6 18.0 Jun 36.7 36.9 26.4 10.4 Jul 43.2 33.4 23.4 19.8
58.8 59.0 56.4 59.0 55.2 59.9
56.1 55.0 53.6 57.6 55.9 58.4
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 Index S.Adj. % % % +/- 50 = no chg Index
2017 Feb 33.5 45.5 21.1 12.4 Mar 38.9 46.1 15.0 23.9 Apr 36.5 46.3 17.2 19.4 May 39.2 42.2 18.6 20.6 Jun 40.9 45.0 14.1 26.9 Jul 47.0 39.2 13.8 33.2
56.2 62.0 59.7 60.3 63.4 66.6
55.8 56.2 58.0 59.5 58.8 61.3
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.
Further sharp increase in demand for staff
Demand for staff continued to rise sharply during July, as shown by the Report on Jobs Vacancy Index posting well above the no-change 50.0 threshold at 63.4. This was up slightly from 63.2 in June, and the joint-steepest increase seen since August 2015 (on par with May 2017). Similarly steep increases in vacancies were registered for both permanent and temporary job roles.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month Increasing rate of growth
75 70
Temp/Contract Vacancies
65 60 55
Public & private sector vacancies
The demand for staff across the private sector continued to outpace that recorded for the public sector in July. The number of vacancies at private sector companies increased sharply overall, with growth picking up slightly since June. However, growth in demand for both temporary and permanent workers softened across the public sector.
50 45 40
Permanent Vacancies
35 30
Increasing rate of decline 2007
2008
2009
25 2010
2011
2012
2013
2014
2015
2016
2017
Other vacancy indicators
Data from the Office for National Statistics (ONS) indicated that job vacancies rose by 3.9% year-on-year over the second quarter, down only slightly from a +4.3% increase over the three months to May. Meanwhile, internet-based recruitment spending fell by -0.6% over the first quarter of the year, following a 14.6% increase in Q4 2016. 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 Mar’17
Apr
May
J un
Jul
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month
Total 62.8 62.2 63.4 63.2 63.4 Permanent Staff 62.8 62.3 63.4 63.2 63.4 Temporary Staff 62.0 61.3 63.4 63.1 63.3 Public & private sector vacancies (not seasonally adjusted)
Public: perm 49.2 49.1 53.4 Public: temp 51.8 49.6 57.5 Private: perm 67.4 64.6 63.8 Private: temp 63.1 62.5 63.0
56.2 55.7 65.0 65.0
52.9 55.4 65.5 65.5
Other key vacancy data Annual % change
ONS Vacancy Survey 2.1 5.2 4.3 3.9 n/a Internet recruitment -0.6 -- -- -- Sources: Vacancy data provided by ONS via Thomson Reuters Datastream. Internet recruitment spending provided by WARC.com
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
July survey data signalled sharp increases in demand for permanent workers across all monitored job categories, led by Engineering. Accounting/Financial and IT & Computing achieved second and third place in the rankings, respectively.
Engineering* Accounting/Financial IT & Computing Secretarial/Clerical Executive/Professional Blue Collar Hotel & Catering Nursing/Medical/Care Construction*
This year (Last year) Rank Jul'17 Rank Jul'16
1 65.5 (3) (56.6) 2 65.2 (5) (56.2) 3 64.9 (2) (57.0) 4 62.7 (8) (53.8) 5 61.6 (4) (56.5) 6 61.4 (7) (54.5) 7 61.3 (6) (55.2) 8 61.3 (1) (59.7) 9 56.1 (9) (48.4)
70
50
50 Temp
40
(Last year) Rank Jul'16
30 2007
2009
2011
2013
2015
20
2017
90
Executive & Professional 90
80
80 Perm
70
1 68.4 (3) (57.4) 2 66.0 (2) (60.1) 3 65.5 (1) (65.0) 4 63.7 (6) (56.5) 5 61.1 (7) (53.8) 6 60.9 (4) (56.9) 7 59.7 (8) (53.3) 8 59.6 (5) (56.7) 9 55.3 (9) (51.6)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
2013
2015
2017
IT & Computing Perm
Temp
40
30
30 2007
2009
2011
2013
2015
20
2017
90
Blue Collar
2007
2009
2011
2013
2015
2017
Hotel & Catering
80 Temp
70 60
60
50
50
40
Temp
70
40
Perm
Perm
30
30 2007
2009
2011
2013
2015
20
2017
90
Nursing/Medical/Care 90
80
80 Temp
70 60
60
50
50 Perm
40
2007
2009
2011
2013
2015
2017
Engineering Perm
70 Temp
40
30
30 2007
2009
2011
2013
2015
2017
20 2013
Construction Perm
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.
2011
50 Temp
40
90
2009
60
50
20
2007
70
60
20
Temp
40
30
20
Perm
60
80
Blue Collar recorded the quickest upturn in temporary staff demand of all nine job categories in July. Hotel & Catering and Nursing/Medical/Care also saw steep increases in demand, while Executive/Professional placed at the bottom of the table. This year Rank Jul'17
Perm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
Blue Collar Hotel & Catering Nursing/Medical/Care Engineering* IT & Computing Secretarial/Clerical Accounting/Financial Construction* Executive/Professional
90
Secretarial & Clerical
80
60 50
Temp
40 30 20 2013
2014
2015
2016
2017
2014
2015
2016
2017
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.
Availability of permanent staff
Recruitment consultancies signalled a further sharp reduction in permanent staff availability at the start of the third quarter. This was despite the rate of deterioration easing to the least marked for three months. Permanent candidate numbers fell sharply across all monitored regions. The South of England registered the steepest rate of reduction for the fourth month in a row.
Availability of temp/contract staff
The availability of staff to fulfil temporary/contract roles also fell again during July. Notably, the latest drop in short-term staff candidates was the quickest seen for just over one-and-a-half years. The South of England continued to see the sharpest deterioration in temporary staff availability, but marked reductions were also noted in all of the remaining monitored regions.
Staff Availability 50 = no change on previous month Staff Availability Index
80 70 60 50 40 30
Deteriorating availability
20
50 = no change on previous month Improving availability
Accounting/Financial: Audit, Accounts, Cost Management, Finance, Payroll, Risk, Treasury. Engineering: Automotive, Electronic Engineers, Engineers, Maintenance Engineers, Technicians. Executive/Professional: Business Analysts, Compliance, Legal, Marketing, Media, Project Managers, Senior Management. Hotel/Catering: Chefs. IT/Computing: Cyber Security, Devops, IT, Java, SC/DV Cleared Staff. Nursing/ Medical/Care: Care Workers, Healthcare Assistants, Home Carers, Support Workers. Secretarial/Clerical: Administration, Legal Personal Assistants, Receptionists. Other: Buyers, Customer Service, Languages, Sales.
Key temp skills reported in short supply:*
Accounting/Financial: Audit, Accounts, Accountants, Cost Management, Risk. Blue Collar: Cleaners, Decorators, Drivers, Electricians, Fork Lift Drivers, HGV Drivers, Production, Site Managers, Unskilled Workers, Warehouse Workers, Welders. Construction: Labourers. Engineering: Engineers, Infrastructure Engineers. Executive/Professional: Business Analysts, Compliance, Marketing, Media, Professional Services, Project Management. IT/Computing: Cyber Security, IT, Software Developers, Testers. Nursing/Medical/Care: Care Workers, Healthcare Assistants, Home Carers, Nurses, Support Workers. Secretarial/Clerical: Administration. Other: Buyers, Customer Service, Languages, Sales.
*consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
90 80 70
Temp Availability
60 50 40
Permanent Availability
30
Deteriorating availability 2007
Key permanent staff skills reported in short supply:*
Improving availability
90
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
20
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago? Better Same Worse Net Index S.Adj. % % % +/- Index
2017 Feb 16.8 Mar 11.1 Apr 8.3 May 7.6 Jun 9.1 Jul 8.7
50.0 33.2 -16.3 56.0 32.9 -21.8 53.4 38.4 -30.1 49.7 42.8 -35.2 49.4 41.5 -32.3 47.9 43.4 -34.7
41.8 39.1 35.0 32.4 33.8 32.6
39.0 39.9 36.6 33.2 34.8 35.6
Availability of temporary/contract staff 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
2017 Feb 18.4 Mar 12.4 Apr 11.7 May 14.3 Jun 11.3 Jul 9.8
55.3 26.2 -7.8 58.6 29.0 -16.6 55.1 33.2 -21.5 50.5 35.2 -20.9 53.2 35.5 -24.2 49.9 40.2 -30.4
46.1 41.7 39.2 39.5 37.9 34.8
42.8 42.0 38.8 40.2 38.6 37.7
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.
50 = no change on previous month 70
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
Starting salaries awarded to successful candidates placed into permanent roles continued to increase in July. Furthermore, the rate of pay inflation picked up since June to reach a 20-month record. A number of recruitment agencies mentioned that employers offered higher salaries in order to attract and secure skilled candidates. Permanent starting salaries rose across all monitored UK regions, with the steepest rate of inflation seen in the South of England.
Temp/contract pay rates
60 55 50 45 Temp/Contract Hourly Pay Rates 40 Increasing rate of decline
Temporary/contract staff hourly pay rates increased again in July. The rate of inflation softened slightly since June, but was still one of the strongest recorded for the past two years. On a regional basis, Scotland registered the sharpest increase in temp pay rates. However, rates of inflation were still marked across all other monitored regions.
35 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Permanent Salaries
UK average weekly earnings Data from the Office for National Statistics showed that employee earnings (including bonuses) increased by +1.8% on the year in the three months to May. This marked the slowest increase in pay since late-2014, with the private sector seeing a noticeable slowdown in earnings growth in the latest period (down to +1.9%).
Yr/yr % chg in average weekly earnings (3mma)
Pay Pressures
2014 2015 2016 Feb'17 Mar Apr May
Whole economy 1.0 2.6 2.4 2.2 2.3 2.1 1.8
Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago? Higher Same Lower Net Index S.Adj. % % % +/- Index
2017 Jan 18.6 77.5 3.9 14.7 57.3 58.6 Feb 22.5 73.5 4.0 18.5 59.3 59.5 Mar 22.9 74.1 3.0 19.8 59.9 59.0 Apr 21.7 74.5 3.8 17.9 59.0 57.4 May 25.3 72.2 2.6 22.7 61.4 59.5 Jun 24.2 73.2 2.6 21.6 60.8 60.1 Jul 25.3 71.4 3.3 22.0 61.0 60.6
Private sector 1.3 3.0 2.6 2.4 2.6 2.4 1.9 Public sector 0.6 0.9 1.6 1.3 1.2 1.1 1.4 Services
1.0 2.8 2.3 2.1 2.4 2.2 2.0
Manufacturing 2.1 1.6 2.4 1.8 1.8 1.7 1.0 Construction 1.0 2.8 4.8 3.0 1.7 1.1 -0.1
Higher Same Lower Net Index S.Adj. % % % +/- Index
Annual percent change 9 Public sector 6
3
0 Private sector -3
-6 2007
2008
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
2009
2010
2011
2012
2013
2014
2015
2016
2017 Jan 13.7 81.2 5.1 8.6 54.3 56.0 Feb 15.5 81.0 3.5 12.0 56.0 56.2 Mar 14.7 80.6 4.7 10.1 55.0 54.9 Apr 26.1 70.8 3.1 23.0 61.5 57.5 May 20.2 74.3 5.5 14.8 57.4 57.0 Jun 19.3 76.9 3.9 15.4 57.7 57.8 Jul 18.9 76.8 4.4 14.5 57.2 57.5
Report on Jobs | Recruitment Industry Survey
7
Feature Earnings
Earnings growth softens to two-and-a-half year low The latest data from the Office for National Statistics indicates a further rise in average weekly earnings across the UK in the three months to May, with total pay (including bonuses) increasing by 1.8% on an annual basis. However, this marked a slowdown in earnings growth for the second survey period in a row, and was the joint-weakest increase since the three months to October 2014. Average weekly earnings broken down by industry showed that pay trends have weakened across services, manufacturing and construction sectors in recent months. In the service sector, overall earnings rose at an annual rate of 2.0% in the three months to May. Meanwhile, manufacturing pay rose by just 1.0% (the weakest increase since early-2015). In contrast, total pay fell fractionally across the construction sector (-0.1%), to mark the first reduction in earnings since mid-2014.
Jobs transform lives, which is why we are building the best recruitment industry in the world. As the professional body for recruitment we’re determined to make businesses more successful by helping them secure the people they need. We are absolutely passionate and totally committed in this pursuit for recruiters, employers, and the people they hire. Find out more about the Recruitment & Employment Confederation at 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
Average Weekly Earnings
3MMA % y/y 9
Whole economy
6 3 0 -3 -6 Jan-01
Jan-03
Jan-05
Jan-07
Jan-09
Jan-11
Jan-13
Jan-15
Jan-17
Source: ONS via Datastream Average weekly earnings, total pay (including bonuses) in nominal terms
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.
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UK Report on Jobs Retail Sector Staff Demand Since March 2017, recruitment consultants have been asked to comment on the demand for retail staff.
Demand for Permanent Retail Staff July survey data signalled a further increase in permanent retail staff vacancies across the UK. The rate of demand growth remained sharp overall, despite easing for the third month in a row. Nearly three times as many respondents (23%) recorded greater demand for permanent retail employees compared to those that noted a reduction (8%).
Demand for Permanent Retail Sector Workers 50.0 = no-change 65.0
60.0
55.0
50.0
45.0 Mar-17
May-17
Jun-17
Jul-17
Demand for Temporary Retail Sector Workers
Demand for Temporary Retail Staff The number of vacancies for temporary retail workers continued to increase in July. Though solid, the rate of expansion was the slowest seen in five months of data collection. Around 21% of panellists registered greater demand for short-term retail staff, while 13% noted a decline.
Apr-17
50.0 = no-change 65.0
60.0
55.0
50.0
45.0 Mar-17
Apr-17
May-17
Jun-17
Jul-17
The intellectual property rights to this report provided herein is 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. 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.
UK Labour Market
August 8 2017
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Staff appointments increase at fastest rate for over two years as candidate availability drops 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
Permanent Placements
40 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
3 Vacancies
Key points from the July survey:
4 Sectoral demand
Permanent placements growth reaches 27-month record
5 Staff availability
Temp billings increase at the fastest rate for nearly two-and-a-half years
6 Pay pressures 7 Special feature
2017
Marked decline in staff availability contributes to further increases in pay Commenting on the latest survey results, Kevin Green, REC Chief Executive says: “The jobs market continues to confound expectations with both permanent and temporary placements growing at the fastest rate for over two years. Starting salaries are also still rising, so for workers who want to boost their earnings now is a good time to consider moving job.
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]
“It’s clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks. UK employment remains at an all-time high and looks set to keep improving. The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home. Employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers. “London in particular is feeling the Brexit effect. Hiring is still growing but at a much slower rate compared with every other region of the UK. Financial services, a crucial part of the London labour market, are not hiring in their usual quantity as the uncertainty caused by Brexit makes them hesitant. “We can’t ignore the importance of our relationship with the EU to employers. If we want to keep our jobs market successful and vibrant, we must make it easier, not harder, for employers to access the people they need.”
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 July are:
Sharp growth in staff appointments
July survey data indicated that permanent placements increased to the greatest extent in 27 months. At the same time, growth in temp billings improved to a near two-and-a-half year 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 Permanent Placements
35
35
30
30
25
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Robust demand for staff
Recruitment agencies signalled a sustained and marked increase in demand for staff. Furthermore, overall demand for staff rose at its joint-strongest pace for 23 months (on par with May 2017).
Candidate availability continues to decline markedly...
Demand for staff 50 = no change on previous month 75 Temp/Contract Vacancies
65 60
The availability of both permanent and temporary workers continued to fall sharply during July. The rate of reduction eased for permanent staff, but the availability of temporary candidates declined at the quickest pace for just over a yearand-a-half.
55
...imparting further upward pressure on pay
30
Starting salaries for successful permanent candidates rose further in July, with the rate of inflation reaching a 20-month record. At the same time, hourly pay rates for short-term staff continued to increase sharply.
Increasing rate of growth
70
50 45 40 35
Permanent Vacancies Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Staff Availability and Earnings Growth 50 = no change on previous month
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
70 65
30 40
60
50
55
60
50 45
70
Average permanent salaries (LHS)
80
40 35
90 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
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. July survey data signals sharper growth in both permanent placements and temporary billings.
Permanent placements rise at quickest pace since April 2015
UK recruitments agencies signalled a sharp and accelerated increase in permanent placements at the start of the second half of the year. Furthermore, the number of people placed into permanent job roles rose at the quickest pace since April 2015. Anecdotal evidence indicated that growth reflected robust demand for staff at employers. The strongest upturn in permanent placements was recorded in the Midlands, closely followed by the North of England. The weakest increase was seen in London, where growth softened to an eight-month low.
Growth in temp billings accelerates to 29-month record
Agencies’ billings from the employment of temporary/contract workers continued to increase in July. Notably, the rate of expansion accelerated to the quickest seen for nearly two-anda-half years. A number of recruitment agencies indicated that companies took on extra short-term staff due to rising business requirements. All monitored regions saw sharp increases in temp billings during July, led by the North of England.
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.
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 Permanent Placements
40 35 30
Increasing rate of decline
25 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago. Higher Same Lower Net Index S.Adj. % % % +/- 50 = no chg Index
2017 Feb 41.5 34.5 24.0 17.6 Mar 41.4 35.2 23.4 17.9 Apr 37.8 37.2 25.0 12.8 May 42.6 32.9 24.6 18.0 Jun 36.7 36.9 26.4 10.4 Jul 43.2 33.4 23.4 19.8
58.8 59.0 56.4 59.0 55.2 59.9
56.1 55.0 53.6 57.6 55.9 58.4
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 Index S.Adj. % % % +/- 50 = no chg Index
2017 Feb 33.5 45.5 21.1 12.4 Mar 38.9 46.1 15.0 23.9 Apr 36.5 46.3 17.2 19.4 May 39.2 42.2 18.6 20.6 Jun 40.9 45.0 14.1 26.9 Jul 47.0 39.2 13.8 33.2
56.2 62.0 59.7 60.3 63.4 66.6
55.8 56.2 58.0 59.5 58.8 61.3
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.
Further sharp increase in demand for staff
Demand for staff continued to rise sharply during July, as shown by the Report on Jobs Vacancy Index posting well above the no-change 50.0 threshold at 63.4. This was up slightly from 63.2 in June, and the joint-steepest increase seen since August 2015 (on par with May 2017). Similarly steep increases in vacancies were registered for both permanent and temporary job roles.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month Increasing rate of growth
75 70
Temp/Contract Vacancies
65 60 55
Public & private sector vacancies
The demand for staff across the private sector continued to outpace that recorded for the public sector in July. The number of vacancies at private sector companies increased sharply overall, with growth picking up slightly since June. However, growth in demand for both temporary and permanent workers softened across the public sector.
50 45 40
Permanent Vacancies
35 30
Increasing rate of decline 2007
2008
2009
25 2010
2011
2012
2013
2014
2015
2016
2017
Other vacancy indicators
Data from the Office for National Statistics (ONS) indicated that job vacancies rose by 3.9% year-on-year over the second quarter, down only slightly from a +4.3% increase over the three months to May. Meanwhile, internet-based recruitment spending fell by -0.6% over the first quarter of the year, following a 14.6% increase in Q4 2016. 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 Mar’17
Apr
May
J un
Jul
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month
Total 62.8 62.2 63.4 63.2 63.4 Permanent Staff 62.8 62.3 63.4 63.2 63.4 Temporary Staff 62.0 61.3 63.4 63.1 63.3 Public & private sector vacancies (not seasonally adjusted)
Public: perm 49.2 49.1 53.4 Public: temp 51.8 49.6 57.5 Private: perm 67.4 64.6 63.8 Private: temp 63.1 62.5 63.0
56.2 55.7 65.0 65.0
52.9 55.4 65.5 65.5
Other key vacancy data Annual % change
ONS Vacancy Survey 2.1 5.2 4.3 3.9 n/a Internet recruitment -0.6 -- -- -- Sources: Vacancy data provided by ONS via Thomson Reuters Datastream. Internet recruitment spending provided by WARC.com
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
July survey data signalled sharp increases in demand for permanent workers across all monitored job categories, led by Engineering. Accounting/Financial and IT & Computing achieved second and third place in the rankings, respectively.
Engineering* Accounting/Financial IT & Computing Secretarial/Clerical Executive/Professional Blue Collar Hotel & Catering Nursing/Medical/Care Construction*
This year (Last year) Rank Jul'17 Rank Jul'16
1 65.5 (3) (56.6) 2 65.2 (5) (56.2) 3 64.9 (2) (57.0) 4 62.7 (8) (53.8) 5 61.6 (4) (56.5) 6 61.4 (7) (54.5) 7 61.3 (6) (55.2) 8 61.3 (1) (59.7) 9 56.1 (9) (48.4)
70
50
50 Temp
40
(Last year) Rank Jul'16
30 2007
2009
2011
2013
2015
20
2017
90
Executive & Professional 90
80
80 Perm
70
1 68.4 (3) (57.4) 2 66.0 (2) (60.1) 3 65.5 (1) (65.0) 4 63.7 (6) (56.5) 5 61.1 (7) (53.8) 6 60.9 (4) (56.9) 7 59.7 (8) (53.3) 8 59.6 (5) (56.7) 9 55.3 (9) (51.6)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
2013
2015
2017
IT & Computing Perm
Temp
40
30
30 2007
2009
2011
2013
2015
20
2017
90
Blue Collar
2007
2009
2011
2013
2015
2017
Hotel & Catering
80 Temp
70 60
60
50
50
40
Temp
70
40
Perm
Perm
30
30 2007
2009
2011
2013
2015
20
2017
90
Nursing/Medical/Care 90
80
80 Temp
70 60
60
50
50 Perm
40
2007
2009
2011
2013
2015
2017
Engineering Perm
70 Temp
40
30
30 2007
2009
2011
2013
2015
2017
20 2013
Construction Perm
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.
2011
50 Temp
40
90
2009
60
50
20
2007
70
60
20
Temp
40
30
20
Perm
60
80
Blue Collar recorded the quickest upturn in temporary staff demand of all nine job categories in July. Hotel & Catering and Nursing/Medical/Care also saw steep increases in demand, while Executive/Professional placed at the bottom of the table. This year Rank Jul'17
Perm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
Blue Collar Hotel & Catering Nursing/Medical/Care Engineering* IT & Computing Secretarial/Clerical Accounting/Financial Construction* Executive/Professional
90
Secretarial & Clerical
80
60 50
Temp
40 30 20 2013
2014
2015
2016
2017
2014
2015
2016
2017
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.
Availability of permanent staff
Recruitment consultancies signalled a further sharp reduction in permanent staff availability at the start of the third quarter. This was despite the rate of deterioration easing to the least marked for three months. Permanent candidate numbers fell sharply across all monitored regions. The South of England registered the steepest rate of reduction for the fourth month in a row.
Availability of temp/contract staff
The availability of staff to fulfil temporary/contract roles also fell again during July. Notably, the latest drop in short-term staff candidates was the quickest seen for just over one-and-a-half years. The South of England continued to see the sharpest deterioration in temporary staff availability, but marked reductions were also noted in all of the remaining monitored regions.
Staff Availability 50 = no change on previous month Staff Availability Index
80 70 60 50 40 30
Deteriorating availability
20
50 = no change on previous month Improving availability
Accounting/Financial: Audit, Accounts, Cost Management, Finance, Payroll, Risk, Treasury. Engineering: Automotive, Electronic Engineers, Engineers, Maintenance Engineers, Technicians. Executive/Professional: Business Analysts, Compliance, Legal, Marketing, Media, Project Managers, Senior Management. Hotel/Catering: Chefs. IT/Computing: Cyber Security, Devops, IT, Java, SC/DV Cleared Staff. Nursing/ Medical/Care: Care Workers, Healthcare Assistants, Home Carers, Support Workers. Secretarial/Clerical: Administration, Legal Personal Assistants, Receptionists. Other: Buyers, Customer Service, Languages, Sales.
Key temp skills reported in short supply:*
Accounting/Financial: Audit, Accounts, Accountants, Cost Management, Risk. Blue Collar: Cleaners, Decorators, Drivers, Electricians, Fork Lift Drivers, HGV Drivers, Production, Site Managers, Unskilled Workers, Warehouse Workers, Welders. Construction: Labourers. Engineering: Engineers, Infrastructure Engineers. Executive/Professional: Business Analysts, Compliance, Marketing, Media, Professional Services, Project Management. IT/Computing: Cyber Security, IT, Software Developers, Testers. Nursing/Medical/Care: Care Workers, Healthcare Assistants, Home Carers, Nurses, Support Workers. Secretarial/Clerical: Administration. Other: Buyers, Customer Service, Languages, Sales.
*consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
90 80 70
Temp Availability
60 50 40
Permanent Availability
30
Deteriorating availability 2007
Key permanent staff skills reported in short supply:*
Improving availability
90
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
20
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago? Better Same Worse Net Index S.Adj. % % % +/- Index
2017 Feb 16.8 Mar 11.1 Apr 8.3 May 7.6 Jun 9.1 Jul 8.7
50.0 33.2 -16.3 56.0 32.9 -21.8 53.4 38.4 -30.1 49.7 42.8 -35.2 49.4 41.5 -32.3 47.9 43.4 -34.7
41.8 39.1 35.0 32.4 33.8 32.6
39.0 39.9 36.6 33.2 34.8 35.6
Availability of temporary/contract staff 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
2017 Feb 18.4 Mar 12.4 Apr 11.7 May 14.3 Jun 11.3 Jul 9.8
55.3 26.2 -7.8 58.6 29.0 -16.6 55.1 33.2 -21.5 50.5 35.2 -20.9 53.2 35.5 -24.2 49.9 40.2 -30.4
46.1 41.7 39.2 39.5 37.9 34.8
42.8 42.0 38.8 40.2 38.6 37.7
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.
50 = no change on previous month 70
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
Starting salaries awarded to successful candidates placed into permanent roles continued to increase in July. Furthermore, the rate of pay inflation picked up since June to reach a 20-month record. A number of recruitment agencies mentioned that employers offered higher salaries in order to attract and secure skilled candidates. Permanent starting salaries rose across all monitored UK regions, with the steepest rate of inflation seen in the South of England.
Temp/contract pay rates
60 55 50 45 Temp/Contract Hourly Pay Rates 40 Increasing rate of decline
Temporary/contract staff hourly pay rates increased again in July. The rate of inflation softened slightly since June, but was still one of the strongest recorded for the past two years. On a regional basis, Scotland registered the sharpest increase in temp pay rates. However, rates of inflation were still marked across all other monitored regions.
35 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Permanent Salaries
UK average weekly earnings Data from the Office for National Statistics showed that employee earnings (including bonuses) increased by +1.8% on the year in the three months to May. This marked the slowest increase in pay since late-2014, with the private sector seeing a noticeable slowdown in earnings growth in the latest period (down to +1.9%).
Yr/yr % chg in average weekly earnings (3mma)
Pay Pressures
2014 2015 2016 Feb'17 Mar Apr May
Whole economy 1.0 2.6 2.4 2.2 2.3 2.1 1.8
Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago? Higher Same Lower Net Index S.Adj. % % % +/- Index
2017 Jan 18.6 77.5 3.9 14.7 57.3 58.6 Feb 22.5 73.5 4.0 18.5 59.3 59.5 Mar 22.9 74.1 3.0 19.8 59.9 59.0 Apr 21.7 74.5 3.8 17.9 59.0 57.4 May 25.3 72.2 2.6 22.7 61.4 59.5 Jun 24.2 73.2 2.6 21.6 60.8 60.1 Jul 25.3 71.4 3.3 22.0 61.0 60.6
Private sector 1.3 3.0 2.6 2.4 2.6 2.4 1.9 Public sector 0.6 0.9 1.6 1.3 1.2 1.1 1.4 Services
1.0 2.8 2.3 2.1 2.4 2.2 2.0
Manufacturing 2.1 1.6 2.4 1.8 1.8 1.7 1.0 Construction 1.0 2.8 4.8 3.0 1.7 1.1 -0.1
Higher Same Lower Net Index S.Adj. % % % +/- Index
Annual percent change 9 Public sector 6
3
0 Private sector -3
-6 2007
2008
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
2009
2010
2011
2012
2013
2014
2015
2016
2017 Jan 13.7 81.2 5.1 8.6 54.3 56.0 Feb 15.5 81.0 3.5 12.0 56.0 56.2 Mar 14.7 80.6 4.7 10.1 55.0 54.9 Apr 26.1 70.8 3.1 23.0 61.5 57.5 May 20.2 74.3 5.5 14.8 57.4 57.0 Jun 19.3 76.9 3.9 15.4 57.7 57.8 Jul 18.9 76.8 4.4 14.5 57.2 57.5
Report on Jobs | Recruitment Industry Survey
7
Feature Earnings
Earnings growth softens to two-and-a-half year low The latest data from the Office for National Statistics indicates a further rise in average weekly earnings across the UK in the three months to May, with total pay (including bonuses) increasing by 1.8% on an annual basis. However, this marked a slowdown in earnings growth for the second survey period in a row, and was the joint-weakest increase since the three months to October 2014. Average weekly earnings broken down by industry showed that pay trends have weakened across services, manufacturing and construction sectors in recent months. In the service sector, overall earnings rose at an annual rate of 2.0% in the three months to May. Meanwhile, manufacturing pay rose by just 1.0% (the weakest increase since early-2015). In contrast, total pay fell fractionally across the construction sector (-0.1%), to mark the first reduction in earnings since mid-2014.
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Average Weekly Earnings
3MMA % y/y 9
Whole economy
6 3 0 -3 -6 Jan-01
Jan-03
Jan-05
Jan-07
Jan-09
Jan-11
Jan-13
Jan-15
Jan-17
Source: ONS via Datastream Average weekly earnings, total pay (including bonuses) in nominal terms
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.
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UK Report on Jobs Retail Sector Staff Demand Since March 2017, recruitment consultants have been asked to comment on the demand for retail staff.
Demand for Permanent Retail Staff July survey data signalled a further increase in permanent retail staff vacancies across the UK. The rate of demand growth remained sharp overall, despite easing for the third month in a row. Nearly three times as many respondents (23%) recorded greater demand for permanent retail employees compared to those that noted a reduction (8%).
Demand for Permanent Retail Sector Workers 50.0 = no-change 65.0
60.0
55.0
50.0
45.0 Mar-17
May-17
Jun-17
Jul-17
Demand for Temporary Retail Sector Workers
Demand for Temporary Retail Staff The number of vacancies for temporary retail workers continued to increase in July. Though solid, the rate of expansion was the slowest seen in five months of data collection. Around 21% of panellists registered greater demand for short-term retail staff, while 13% noted a decline.
Apr-17
50.0 = no-change 65.0
60.0
55.0
50.0
45.0 Mar-17
Apr-17
May-17
Jun-17
Jul-17
The intellectual property rights to this report provided herein is 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. 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.
