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UK job market hit by candidate shortages

Employees are hesitant to switch roles and sectors. Photo: Getty Images
Employees are hesitant to switch roles and sectors. Photo: Getty Images (MediaNews Group/Reading Eagle via Getty Images via Getty Images)

Candidate availability dropped sharply and at one the fastest rates on record last month, weighing on recruiters’ ability to place new hires, new data revealed.

The latest KPMG and Recruitment & Employment Confederation (REC) jobs report survey – answered by around 400 UK recruitment and employment consultancies – signalled a further marked rise in hiring activity at the start of the final quarter of the year.

But growth of both permanent staff appointments and temp billings softened to a six-month low, amid a shortage of potential employees.

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.


“Employees are hesitant to switch roles and sectors, which could impact the bounce-back recruiters have experienced since the easing of pandemic restrictions,” said Claire Warnes, head of education, skills and productivity at KPMG UK.

This comes as total vacancies expanded at a slightly softer, but still robust, rate in October.

Meanwhile, a combination of candidate scarcity and robust demand for staff added upward pressure on rates of starting pay.

Both starting salaries and temp wages increased at the quickest rates seen in over 24 years of data collection, as companies offered higher pay to attract and secure staff.

Read more: UK house prices hit record high yet again

“Companies are still offering higher salaries to attract and secure talent – with starting pay inflation reaching another record high this month – but we know this isn’t the answer to boosting productivity,” said Warnes.

She said job seekers need to feel confident that the skills and qualifications they’ve gained in one sector are valued in another, which is why she believes employers and government must invest in training and development if they are to attract a wider range of candidates into these high demand sectors.

Demand for permanent workers rose across all ten monitored job categories at the start of the fourth quarter. Hotel and catering saw the steepest increase in demand for permanent staff. Retail saw the softest rise in vacancies, albeit one that was still sharp.

Nursing and medical care topped the rankings for temporary staff demand in October.

"As we move into the next stage of recovery, it's vital the government puts measures in place that will help companies to invest and grow, stimulate the UK's productivity and support the levers that help those furthest from the jobs market into work," said Kate Shoesmith, deputy CEO of the REC.

"Last week's Budget was a start, but there needs to be a radical shift across government departments to collaborate in order to deliver a skills revolution in the UK. This will only be successful if government and business work together to plan for future workforce needs."

She said recruiters are keen to work with government in such a joint forum.

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