HR · 8 August 2017

Employers push up salaries as staff vacancies rise at fastest rate for two years

Construction workers and architect wearing reflective clothing reviewing blueprint at construction site.
Business owners in the Midlands registered the highest growth in job vacancies

UK employers are posting staff vacancies at the fastest rate for over two years, according to new findings, but high competition for skilled workers has forced business owners to increase starting salaries.

In a survey of employment agencies carried out by market research company Markit, for the Recruitment and Employment Confederation (REC), demand for both permanent and short-term staff continued to rise throughout July 2017.

As well as a 27-month high for permanent placements, temporary job offers also increased at the fastest rate for over two-and-a-half years. Overall, total demand for staff rose at the strongest pace for 23 months, on a par with May 2017.

In July, the Office for National Statistics (ONS) reported that UK unemployment had dropped to 4.5 per cent – it’s lowest since records began in 1975. However, the increased competition for skilled workers has forced employers to make better offers to candidates.

While starting salaries for permanent positions continued to rise in July, hourly pay rates for short-term staff also increased “sharply”, the REC claimed.

Commenting on the findings, REC chief executive Kevin Green said Britain’s strained jobs market continued to “confound expectations”, with demand for both temporary and permanent candidates escalating.

“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,” Green added.

With strong uplifts in permanent positions recorded in the Midlands and the North of England, employers in London appeared to ease off recruitment, with an eight-month low in growth.

Green added: “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.

“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.”

The engineering sector posted the most staff vacancies in July, followed by the financial industry and IT firms.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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