Hiring has fallen to its slowest rate in a year despite vacancy growth hitting a six-month high, a poll of employers has found.
The latest Report on Jobs survey, by the Recruitment and Employment Confederation (REC) and KPMG, saw its permanent placement index drop to a 12 month low of 64.1 in March. The temporary placement index also fell to an 11 month low of 60.7.
The index is based on the survey of 400 recruiters and is calculated by adding the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses. A score higher than 50 indicates more employers are boosting employment, and a score below 50 indicates the reverse.
The report also found that labour supply continued to decline, with the total staff availability index reading 31.9, while permanent staff availability fell for the fourteenth consecutive month and at the quickest rate in four months.
Jon Boys, labour market economist at the CIPD, said the contest for talent was still “fierce”, and recommended employers looking for candidates focus not just on starting salaries but also on aligning their offerings to candidate values. “This includes flexible working in all its guises, not just home working,” he said.
Boys added that existing workforces were sometimes overlooked as a potential pool of talent. “Employers must consider the training and development needs of this group and create pathways to progression,” he said.
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Claire Warnes, head of education, skills and productivity at KPMG UK, said that there were “simply not enough candidates in all sectors” to fill the increasing number of job vacancies.
“With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need” she said.
However, the low level of unemployment means that jobseekers have “many great opportunities” to join the workforce, she added.
The findings come as official ONS data shows that vacancies were up 114 per cent compared to the same time a year ago. Total vacancies now stand at 1,318,000 million – the highest seen since the series began in 2001.
The same report also revealed that 58 per cent of recruiters noted higher starting salaries in March, with only 2 per cent reporting a fall.
The Report on Jobs permanent salaries index rose to 77.9 in March, while the temporary wages index also increased for the thirteenth month in a row to 66.9.
Neil Carberry, chief executive of the REC, said not only were labour and skills shortages driving inflation, but that starting salaries were also reflecting the growing cost of living crisis.
He added that a recent increase in Covid infection levels was contributing to higher demand for temporary workers “particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates”. Conversely permanent placements slowed down as the market started to stabilise after a period of high growth and economic uncertainty returned.