Talent shortages lead to stronger demand for recruitment agencies says REC report

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Employers are increasingly turning to recruitment agencies to fill roles as talent shortages bite, according to the latest IHS Markit/Recruitment & Employment Confederation report.

‘Report on Jobs’, released this morning, reveals that agency recruiters report a marked rise in permanent staff placements in January, with the rate of expansion the joint-steepest since April 2015. However, growth in temp billings softened to a 10-month low, but was sharp overall.

The report also reveals overall demand for staff continued to rise sharply in January, despite growth of demand softening to a 13-month low, with both perm and temp staff vacancies continued to rise at historically marked rates.

Numbers available to fulfil perm and temp roles continued to contract at historically sharp rates in January, though rates of contraction softened slightly in both cases compared to December.

Regionally, the North of England witnessed the fastest increase in permanent placements, though rates of growth were also sharp in the other four monitored regions. The Midlands saw the fastest increase in temp billings, while sharp growth was also seen in the North and South of England and London. Meanwhile, Scotland posted a modest upturn following a reduction in December.

All nine types of permanent jobs monitored by the survey saw improved levels of demand for staff in January, with IT & computing leading overall rankings, followed closely by engineering and accounting/financial.

Hotel & catering was the most in-demand category for temp/contract staff in January, while blue collar and nursing/medical/care workers were also in demand. Conversely, construction posted the softest increase in vacancies.

Commenting on the data, REC CEO Kevin Green pointed to a continued rise in jobs filled via recruiters as it gets more challenging for businesses to find candidates. 

“The UK has almost full employment and the country is plagued by labour, skills and talent shortages. This increasing competition for good quality staff is driving up starting salaries with employers willing to pay higher wages to attract the right people. So, it’s a good time to move jobs, especially as employers aren’t increasing wages for their existing workforce.

“The struggle to find appropriate candidates will get worse. We are therefore asking for a balanced and evidence-based immigration system. Businesses urgently need to invest in the upskilling of their workforce. The government can help by turning the Apprenticeship Levy into a broader training levy. It’s time they put the concerns of UK businesses at the top of their agenda.”

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