Review of the UK Jobs Market – August

Welcome to our Review of the UK Jobs Market for August 2022. Each month, we share market insight on the state of the UK jobs market.

You can either read our short blog, or see our infographic.

Uncertainty over the outlook weighs on recruitment activity in August

The main findings were:

• Overall vacancies expand at slowest rate for 18 months
• Softer increase in starting salaries since June 2021
• Candidate availability falls at slightly weaker rate

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Staff Appointments

Permanent staff appointments continue to rise

Though solid, the rate of growth was only slightly quicker than that seen in July. Greater overall demand for staff and the filling of vacancies has supported the latest upturn in placements. However, a deteriorating economic outlook, rising costs and candidate shortages has limited growth.

Temp billings expand at slowest rate for a year-and-a-half

Temporary placements increased for the twenty-fifth month running in August. Demand for temp staff was robust as clients were often keen to fill roles quickly in order to expand capacity and due to difficulties securing permanent workers.

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Vacancies

Vacancy growth slips to 18-month low

Generally, there was a slower increase in temporary and permanent vacancies during August. Although rising markedly overall, both saw the lost readings since February 2021. The steepest increase in demand was seen for private sector staff, whilst short-term positions in the public sector eased to a 17-month low.

At 1,274,000, the overall number of vacant roles was down from 1,294,000 in the three months to April. Nevertheless, the figure remained very close to the all-time record of 1,299,000 and 55% higher than just before the pandemic.

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Staff Availability

Candidate availability falls at slightly weaker rate in August

The softer decline in overall candidate numbers was largely driven by a weaker drop in permanent worker availability during August. The latest decrease is linked to a generally low unemployment rate and skills shortages, though it’s also thought that greater uncertainty around the outlook and concerns over job security has deterred some people from seeking out new jobs.

August saw a renewed acceleration in the rate of decline in temporary staff availability. This was attributed to strong demand for staff and a preference for permanent jobs.

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Pay Pressures

There was a sustained and sharp increase in salaries awarded to new permanent joiners in August. Although less sharp than previous months. Staff shortages and competition for candidates had reportedly pushed up salaries, as well as the higher cost of living.

Stronger rise in temp pay during August

August saw a further marked increase in average pay for short term staff. The rate of inflation picked up slightly from July, but was the second-softest seen in 14 months. Increased living costs and low candidate supply is said to be driving up hourly pay.

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Source: KPMG and REC UK Report on Jobs 13 September 2022