Staff placements and temp billings continue to rise in the job market as unemployment rates fall to 4.0%. Reported by the Office for National Statistics (ONS) the UK unemployment rate is now at it’s lowest since 1975. Naturally, the reduction in unemployment levels corresponds with strong hiring growth. Though the ongoing decline in candidate shortages has contributed to a persistent rise in starting salaries.

 

A brief recap of the UK job market

Neil Carberry, Chief Executive at the REC commented:

“Businesses are getting on with it driving Britain’s growth – jobs are being created and starting salaries are rising. There are big opportunities out there for candidates right now looking for a new role.

“But how long our labour market can defy gravity if the shape of our future trading arrangements with the EU remain unclear is the big question. Companies are starting to implement contingency plans now – and those who aren’t will need to step up progress.

“The biggest long-term question on jobs is how they will be affected by new technology and stiff price competition driven by value-conscious consumers.”

In what has been a persistent trend, temp billings overall continue to rise sharply. Markedly, the rate of growth accelerated since August and was slightly above the long-run average. Agencies connected higher temp billings to rising activity levels at client companies. Furthermore, in September contractor hourly pay rates increased with the wage inflation expanding since August’s five-month low. The steep increases in pay were recorded across England, with London leading with the sharpest rise.

The REC/IHS Markit’s Report on Jobs suggests that a further weakening of staff availability throughout the third quarter, combined with strong demand for staff, could pave the way for an even sharper increase in pay going forward.

 

Q3 job market index readings           

Below we’ve included data gathered by the REC/IHS Markit for the monthly Report on Jobs. See how contractors have fared in the third quarter within the UK job market.

An index reading above 50 signals an increase in growth from the previous month. Readings below 50 signal a decline compared with the previous month.

Third Quarter for Contractors July August September
Staff Billings 56.8 55.3 55.9
Pay Rates 59.7 58.1 58.8
Job Vacancies – private sector 61.4 60.5 64.9
Job Vacancies – public sector 56.9 56.9 58.4
Contractor availability 41.9 42.5 40.3

 

Working in the public sector, caught inside of IR35 or simply do not want the trouble of running your own limited company? Join us at Cloud9 Umbrella and we can take the hassle out of contracting and look after the administrative burden for you.

Are you a contractor looking to switch from your existing accountant? K&B Accountancy Group offers a simple and straightforward approach to changing accountants. Switch for FREE without the need to pay for any ‘catch up’ or retrospective accountancy fees for the previous year’s accounts and corporation tax return*. Sign up here. *T&Cs apply