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Sharp increase in starting salaries due to skill shortage

Sharp increase in starting salaries due to skill shortage
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Peninsula Team, Peninsula Team

(Last updated )

The number of vacancies in permanent and temporary positions fell again in December, but there is still a shortage of skilled staff

The latest jobs market survey from KPMG and REC reported a ‘subdued’ market towards the end of 2023 with candidate availability on the rise.

Recruitment levels across the board declined again in December, although not as steeply as November. Additionally, overall vacancies fell again; this has been the case for the last three out of four months, with the number of candidates increasing.

Recruiters have put this down to a high number of redundancies mixed with the lack of employment opportunities which means there are more candidates, but finding staff who were ‘suitably skilled’ and competing against other employers increased starting rates in December. However, this is the second-lowest increase since March 2021.

Justine Andrew, partner and head of skills and productivity at KPMG said: ‘While the data for December shows hiring activity for both permanent and temporary roles fell at a softer rate than the previous month, businesses are still making redundancies and pausing hiring due to a lacklustre economic outlook.

‘This has driven a further decline in permanent job opportunities, while we continue to see a rising number of people looking for new work.

‘For those lucky enough to start a new role there was another sharp increase in starting salaries due to competition in skilled workers.’

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Out of the 10 employment categories monitored in the report, the nursing, medical and care professions had the largest growth in vacancies in December 2023. This is the same result as December 2022, however, the number of vacancies has fallen by over half.

The hospitality sector experienced the biggest shift from December 2022 to December 2023. Previously it had the second most permanent positions, now it sits halfway down the list. The construction sector has consistently had the least number of permanent positions.

In temporary positions, hospitality had the most vacancies by far, the reduction of permanent staff positions can be seen to be impacting the temporary staff positions. With minimum wage set to rise once again in April, hotels will have to assess headcounts to determine what is affordable.

Neil Carberry, REC chief executive said: ‘The slowdown in the labour market seems to be easing a bit. Given that December is a time when employers generally postpone activity into the new year, this is a positive sign that the labour market is weathering the current economic storm.

‘Rising demand for healthcare staff emphasises again the importance of supporting NHS performance. Recruiters can see the impact on long NHS waiting lists in the supply of candidates looking for work – addressing this will be a key way to tackle inactivity.’

For more information on minimum wage rates from April, visit BrAInbox today where you can find answers to questions like What are the national minimum wage rates for April 2024?

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