Tag: KPMG

Starting salaries for permanent candidates rise 

KPMG and the REC’s latest UK Report on Jobs was compiled by IHS Markit and was based on responses to questionnaires completed by approximately 400 UK recruitment and employment consultancies.  

Due to a sharp rise in economic activity in the last few months, along with a solid demand for staff, a considerable increase in permanent placements took place, while the number of temporary placements also rose.  

The report revealed a decrease in candidate availability, which isn’t new news considering skills shortages. The reduction in candidates, according to the report, meant there was a dramatic increase in starting salaries for permanent staff and a large increase in salary for short-term positions.  

 Availability of workers falls  

The availability of candidates dropped to a record low this month and, according to the report, underlying data revealed that unprecedented falls in permanent candidate numbers and temp staff supply had driven the latest deterioration in overall availability. The declines were widely associated with a reluctance among employees to switch roles due to the pandemic, fewer EU workers, furloughed staff and skill shortages. 

The combination of Brexit and COVID-19 and the resultant skills shortages have led to increased competition for staff amid the dwindling labour supply. This placed upward on starting salaries. A notable finding in the report stated that salaries for newly placed permanent staff increased at the fastest rate seen in almost 24 years.  

Increased competition for staff amid shrinking labour supply placed further upward pressure on starting pay. Notably, salaries for newly-placed permanent staff increased at the fastest rate seen in nearly 24 years of data collection, while temp wage inflation was the second-quickest on record. 

Regional and sector changes  

All four regions monitored in England, recorded faster rises in permanent placements when compared to the latest survey period. The increase was led by London. Unprecedented upturns were also seen in the North and South of England. London registered the fastest rise in temp billings during August.  

The private sector continued to record much stronger increases in vacancies than the public sector halfway through the third quarter. The steepest increase in demand was signaled for permanent staff in the private sector.  

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, commented on the survey results:  

“Candidate shortages continue to plague businesses, who are all recruiting from the same pool of talent and struggling to fill gaps. While record high permanent placements and higher starting salaries mean it remains a job seekers market, recruiters and employers have seen the most severe decline of candidate availability in the survey’s history and will be thinking about how to attract and retain new staff.  

“This crisis isn’t going away, and the winding down of the furlough scheme at the end of September – while potentially bringing more job hunters to the market – could also add fuel to the labour shortage fire. Many businesses will have changed their business model during the pandemic, and so significant numbers of staff returning from furlough may need reskilling to rejoin the workforce in the same or another sector. 

Neil Carberry, Chief Executive of the REC also commented: “Recruiters are working around the clock, placing more people into work than ever as these figures show. Switching the entire economy on over the summer has created a unique demand spike, and a short-term crisis. 

“But it would be a mistake for businesses to think of this as only a short-term issue. A number of factors mean that the UK labour market will remain tight for several years to come. Business leaders should be looking now at how they will build their future workforces, in partnership with recruiters, including the skills and career path development.”

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Yorkshire has the fastest internet speed in the country

Many large businesses in the UK including PwC, ASDA, UBS, KPMG and Adobe have shared their intent to move to a hybrid of model of working permanently.

But which major cities in the UK offer the best lifestyles for the flexible workforce? Gazprom Energy, the business energy supplier, ranked each major UK city on the following: cost of living, wellbeing (average ratings of life satisfaction, happiness, and anxiety), commuting time (minutes), average salary (£), average internet speed (mbps), and coffee shops per capita.

Once rating was complete, Gazprom created an overall score called the Hybrid Working Score (out of 100) for each city. They then ranked the cities from best to worst.

Key findings from the study include:

  • London is the UK’s worst city for hybrid working (35/100), despite employers in the capital being among the first to instigate hybrid working and offering the most flexible policies
  • York is the best city for hybrid working (64/100), helped along by a moderate cost of living, a respectable wellbeing standard and a lower average commute
  • Surprisingly, Hull and St Albans enjoy the highest average internet speeds (both 138 Mbps) in the country by far, helping employees to get the job done – while those in Worcester (47 Mbps) and Exeter (50 Mbps) have to put up with the worst
  • The worst commutes employees can expect when travelling between home and the office belong to London (avg. 66 min), Nottingham (41 min) and Leeds (40 min)
  • Yorkshire has the fastest average internet speed overall at 85 Mbps, followed closely by the East at 82 Mbps. Northern Ireland and Wales tie on being the regions with the slowest internet connections, at 61 Mbps.
  • Regionally, Yorkshire is also the best part of the UK for hybrid workers, followed by the North West – with Wales and London being the worst.
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UK employers are struggling with the worst labour shortages for almost a quarter of a century as the reopening of the economy continues.

The Recruitment & Employment Confederation (REC) warned that the availability of workers was deteriorating at a record pace, fuelled by factors such as increased hiring, Brexit, pandemic-related uncertainty and the furlough scheme.

The latest REC/KPMG UK Report on Jobs survey revealed that in June permanent staff appointments expanded at the fastest rate since the survey began in October 1997, while temp billings grew at their highest level for nearly 23 years.

But during the same time period, the availability of workers fell at an unprecedented rate, leading to a sharp increase in starting rates of pay.

The demand for staff continued to move beyond crisis-hit sectors such as hospitality, with jobs in IT and computing rising the fastest in June, followed by hotel and catering jobs and engineering.

Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, said the latest figures showed action was needed to address the country’s skills gap: “For the fourth month running we’re seeing a decline in the availability of candidates to fill all these new roles and the most severe deterioration for 24 years. We need action from businesses and government to reskill and upskill furloughed and prospective workers now more than ever, as the increasing skills gap in the workforce has the potential to slow the UK’s economic recovery.”

Neil Carberry, Chief Executive of the REC, added: “Recruiters are working flat out to fill roles across our economy. The jobs market is improving at the fastest pace we have ever seen, but it is still an unpredictable time. We can’t yet tell how much the ending of furlough and greater candidate confidence will help to meet this rising demand for staff. In some key shortage sectors like hospitality, food, driving and IT, more support is likely to be needed to avoid slowing the recovery.

“That means supporting transitions into growing sectors through unemployment support and new skills programmes, as well as making sure the new immigration system reacts to demand, as promised. But it also means that hiring companies need to re-assess their workforce plans. In a tight jobs market, working with professional recruiters to position your firm as an employer of choice is a must.”

Further pain ahead

The situation is likely to get even worse when the travel industry gets back on its feet if the results of a separate survey are to be believed.

Ahead of Grant Schapps’ announcement of the scrapping of home quarantine for fully vaccinated travellers, job board CV-Library ran a survey of travel and tourism workers and found that almost 60% were not planning to return to the industry.

Of those responding to the survey, 68.4% believed the industry would face a shortage of workers, with  58.1% saying they weren’t considering returning even once the industry is fully operational again.

When asked why they were turning their back on the industry, the main reason was that it had shut down and jobs were no longer available. However, almost a third of respondents (30%) said they felt the industry was too unpredictable and almost half (47.2%) felt that the salaries and benefits on offer were now worse than in pre-pandemic times.

Lee Biggins, CEO and founder of CV-library, said: “These results should be alarming for employers, but, sadly, they aren’t surprising. We’ve all witnessed the impact of this pandemic on the hospitality sector and the travel and tourism industry has been the hardest hit sector of all. As such, a shortage of candidates when the restrictions are lifted feels somewhat inevitable.

“It’s crucial that businesses take notice of these results and listen to job seekers. There are plenty of staff out there but, in order to recruit, businesses can’t just pick up where they left off. Competitive pay and benefits must be offered, and with the industry unlikely to be provided with much notice to get back up and running, those with the strongest employer proposition will win the race for talent.”

Graduate solution?

One potential avenue employers grappling with shortages may wish to explore is adapting some of their positions to appeal to the graduate market.

Though vacancy numbers as a whole may be rising, in the graduate market the reverse is true: data from job board network Broadbean showed that graduate and training vacancies were down 66% on pre-pandemic levels in the first half of this year, as well as being down 34% on the first half of last year, when the country was in the thick of the pandemic.

This has led to a situation where the number of applicants per graduate vacancy now stands at 51, up 46% on 2019 numbers.

Alex Fourlis, Managing Director at Broadbean Technology, said: “It is concerning to see that graduate and early careers recruitment is faring considerably worse than other areas of the employment market.

“The fact that vacancy levels today are considerably lower than during the pandemic suggests that while employers are investing in experienced talent at a time when many sectors are contending with skills shortages, there is a real threat that this dearth of talent will be exacerbated in the coming months and years if graduate and early careers recruitment isn’t prioritised by companies.”

Photo courtesy of Canva.com

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