Staff shortages are becoming acute across the South West as the easing of Covid restrictions and a thriving economy have led to a jobs boom.
The latest KPMG and REC, UK Report on Jobs: South of England survey shows the number of people finding permanent work rose to the greatest extent on record, while temporary placements also expanded rapidly.
The upturns coincided with the steepest increase in vacancies since the survey began in October 1997. Pay pressures, meanwhile, intensified, with both starting salaries and temp pay rising at sharper rates.
Recruiters often mentioned this was due to a lack of available staff, with the latest survey showing unprecedented falls in the supply of both permanent and temporary workers across the region.
Ian Brokenshire, senior partner for KPMG in the South West, said the region had experienced the steepest rate of vacancy growth, but also the steepest decline in supply of permanent workers, since this survey began 24 years ago.
He added: “This has led to widely-reported staff shortages particularly in the hospitality and tourism sectors on which the region so heavily relies.
“Local employers have clearly been buoyed by the Government’s plans to effectively end lockdown on July 19, which would represent another significant step on the road to economic recovery.
“However, they now face the challenge of finding the staff to match their appetite for reopening. After such a difficult 18 months for jobseekers, hopefully a balance will quickly be established in the coming weeks and months.”
The number of people placed into permanent roles in the South West rose for the fourth month running in June. The rate of growth continued to pick up from that seen in March and was the sharpest recorded in nearly 24 years of data collection.
The upturn was often linked to stronger market confidence amid an easing of Covid restrictions and efforts to expand capacity. Billings received from the employment of short-term staff in the region continued to rise rapidly in June. Although softening from May's recent peak, the uptick was among the fastest recorded in the survey's history.
Demand for permanent staff in the South West rose at a sharp and accelerated rate in June. Notably, the rate of vacancy growth was the steepest recorded since the survey's inception in October 1997 and the fastest of all four monitored English regions.
Temporary job openings in the region also expanded at a quicker rate in June. Overall, temp vacancies rose rapidly and to the greatest extent since November 1997. The upturn also outpaced that seen at the national level.
The seasonally adjusted Permanent Staff Availability Index posted well below the neutral 50.0 value to signal a rapid fall in the supply of permanent workers in the South West.
Notably, the rate of deterioration was the fastest seen since the survey began in October 1997 and outpaced the UK-wide trend. Recruiters frequently said people were nervous to change roles due to the pandemic, but also linked the fall to Brexit, stronger demand for staff and furlough.
June survey data also signalled an accelerated decline in the number of candidates available for temporary roles in the region. The fall was substantial and the fastest seen in nearly 24 years. Reports from panel members linked the decline to a combination of pandemic-related uncertainty, fewer EU workers, the furlough scheme and a generally low unemployment rate.
Starting salaries awarded to newly-joined permanent staff increased for the fourth successive month in June. The rate of inflation was the quickest recorded since September 2018 and rapid. Anecdotal evidence suggested increased competition for staff and low candidate supply had driven up pay.
Recruitment consultancies in the South West also registered a further increase in average hourly rates of pay for temporary/contract staff in June. Notably, the rate of inflation picked up for the fifth month in a row and was the sharpest seen for just over 23 years.
Panellists often mentioned that companies raised their pay offers in order to attract applicants amid a generally low supply of available workers.
Neil Carberry, chief executive of the REC, said: “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 reassess their workforce plans. In a tight jobs market, working with professional recruiters to position your firm as an employer of choice is a must.”
The KPMG and REC, UK Report on Jobs: South of England is compiled by IHS Markit from responses to questionnaires sent to around 150 recruitment and employment consultancies in the South of England.
