Labour Market Tightest For 20 Years - 09/2000

According to the latest REC Report On Jobs, produced by NTC Research, the UK labour market is the tightest it has been for 20 years. This situation has occurred because the demand for labour is growing at its fastest rate for at least 2 years. Furthermore, this demand is outstripping supply of candidates, which has caused unemployment to fall and an increase in wages and salaries. The inflationary pressures this situation has caused are undoubtedly obvious.

A sharp rise in the number of people placed in permanent employment has indicated a further growth in demand for staff. Though this pace of growth was slower than in the 4 preceding months, it is faster than in 1998 and 1999. Adding to this, growth in temporary staff billings is rising at its fastest pace for two years. The temporary staff market is by far the largest sector of recruitment activity in the UK.

Beyond the placement figures that the REC generates, it also examines recruitment advertising in the national press. Findings indicated that growth in press advertising was 18%. Although this is the slowest monthly rate since March, it is well above the average for 1998 and 1999. This again indicates tightness in the upper end of the market. Interestingly, the REC examination does not include data on Online recruitment advertising. Since this sector is clearly growing exponentially, the actual rise in advertisements must be far grater than stated.

Other research on the number of unfilled vacancies in UK Job Centres showed a new high for the second months running. Only 2.9 people are now available for every unfilled vacancy, which proved that the lower end of the labour market is the tightest for over twenty years.

Despite falling to its lowest level since March, the RECís Job Market Index remains high by historical standards. This shows that employment is rising at its fastest pace for 2 years. Additionally, the CIPS Employment Index shows that though demand is expanding greatly, employment is rising less swiftly ñ pointing again to a shortage of staff. Apparently, the availability of permanent staff is at its lowest ebb since June 1998 ñ having dropped now consecutively for 15 straight months. This indicates that skills shortages are the reason for the disparity between requirements and placements.

Online Recruitment notes carefully changes in the UK job market. Such data is clearly invaluable for recruitment and HR professionals for many reasons. We would however been keen to see that this traditionally accurate source of vital information, remains on the pulse of the market. Without carefully examination of online activity, and incorporation of this data into research, information provided will become increasingly less valid as the UK e-cruitment continues its meteoritic rise.

www.rec.uk.com