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Report on Jobs: Candidate shortages lead to softer rise in hiring and record growth of starting pay

Key findings 

  • Growth in recruitment activity slows slightly, hampered by candidate shortages
  • Starting salaries and temp pay both increase at record rates
  • Vacancy growth remains robust, but softens since September
  • Data collected October 12-25

Candidate shortages remain severe

The overall availability of staff declined again at the start of the fourth quarter. The rate of deterioration eased further from August's all-time record, but was nonetheless the fifth-sharpest seen since the survey began in October 1997. Reduced candidate availability was often linked to a combination of high demand for staff, general labour shortages, fewer foreign workers and hesitancy among employees to switch or seek out new roles.

Growth of demand for staff softens only slightly

Although growth of demand for staff slipped to a five-month low in October, it remained substantial overall and much quicker than the series average. Slower, but still strong, increases in vacancies were signalled for both permanent and temporary roles.

Regional and Sector Variations

Out of the four monitored English regions, only the Midlands noted a stronger rise in permanent placements, as rates of increase slowed elsewhere. Nonetheless, growth remained sharp across all four areas. The North of England posted the sharpest rise in temp billings of all four monitored English regions. The softest upturn was meanwhile seen in the South of England.

Vacancies continued to rise more sharply in the private than public sector in October, with the steepest increase in demand seen for permanent staff in the private sector. The slowest upturn in demand was seen for permanent workers in the public sector, though growth remained sharp overall. Demand for permanent workers rose across all ten monitored job categories at the start of the fourth quarter. Hotel & Catering saw the steepest increase in demand for permanent staff. Retail saw the softest rise in vacancies, albeit one that was still sharp.

Nursing/Medical/Care topped the rankings for temporary staff demand in October, followed by Hotel & Catering. Nonetheless, robust increases in vacancies were also seen across the other eight categories monitored by the survey.


The latest KPMG and REC, UK Report on Jobs survey signalled a further marked rise in hiring activity at the start of the final quarter of the year. However, growth of both permanent staff appointments and temp billings softened to a six-month low, as candidate shortages weighed on recruiters’ ability to place new hires. Overall candidate availability dropped sharply and at one the fastest rates on record.

Total vacancies expanded at a slightly softer, but still robust, rate in October. Strong demand for staff and a steep fall in labour supply drove the sharpest increases in starting pay since the survey began in October 1997.

The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

REC - London

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