Record Starting Salaries As Recruitment Spikes

Posted on Wednesday, February 16, 2022 by Lydia SinclairNo comments

Starting salaries have increased at record rates, and levels of permanent employment grew in November, according to the latest Report on Jobs, compiled by KPMG and the Recruitment and Employment Confederation (REC).

According to Reuters, starting salaries have been rising each month since March 2021, and temporary wages have also increased, with pay for short-term staff increasing for the ninth month in a row.

The Permanent Salaries Index – where a score higher than 50 indicates an increase in salaries, while a score below 50 indicates a decrease – rose slightly between October and November, from 77.2 to 77.8.

However, the continued growth in wages for temporary jobs did slow down last month, as the Temporary Wages Index fell from 70.7 to 68.7 nationally, but there were regional differences, with the Midlands seeing the highest increase, from 69.6 to 70.9.

There was a continued increase in permanent staff appointments for the ninth month in a row, with the Permanent Placements Index rising from 66.8 in October to 69.2 in November.

The report draws on data gained from a survey of 400 UK recruitment and employment consultancies, who attributed the rise to continued demand for staff. However, according to the survey, there were reports that low candidate supply had impacted employers’ ability to fill vacant roles.

Temporary appointments also saw an increase, with the Temporary Billings Index increasing slightly from 60.9 to 61, but a sharp increase in London, from 60.2 to 65.5.

Clare Warnes, the head of education, skills and productivity at KPMG, said she was reassured by employer confidence to hire, but believe the current trajectory is unsustainable, and that demand for talent has been draining an already diminished pool, and feeding into inflationary pressures.

The priority must be to replenish the workforce and ensure businesses can access the required talent, she said.

“That means equipping job seekers with the skills that employers and new industries are looking for, increasing labour market flexibility and improving transport links,” she said.

The availability of permanent staff continued to decrease, but November saw the lowest decrease in six months, as the Permanent Staff Availability Index increased from 27.4 to 31.2

Temporary candidate numbers also decreased, and again, the lowest decline in six months, with the Temporary Staff Availability Index rising from 28.9 in October to 31.3 in November.

Neil Carberry, chief executive of the REC, said that the figures were positive for those looking for a job because demand for staff has increased starting salaries and temporary rates of pay.

He said that hospitality will be at the forefront of any changes in the run-up to the festive season, and the impact of inflation will be felt ‘as purses tighten’ in January, but he added that the omicron variant of the coronavirus could change the outlook for December.

“The labour market will remain tight for some time to come… this will put a premium on skills development, and the flexibility to hire overseas when necessary,” he said.

“These two issues will be critical ones for the government to address next year – both levelling up and delivering a global Britain rely on them.”


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