LONDON — The number of permanent job vacancies grew at its quickest pace in 27 months in July, but employers are struggling to fill them.
Demand for candidates reached a joint 23-month high, according to a report from the Recruitment and Employment Confederation, with strong growth across all UK regions apart from London.
As a result, salary increases hit a 20-month high last month, while “hourly pay rates for short-term staff continued to increase sharply,” according to the study.
Candidates in engineering, accounting and IT roles were the most sought after.
The gap between demand and supply of applicants has been exacerbated by the falling numbers of EU workers in the UK.
Kevin Green, CEO of REC, said: “It’s clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks.”
“The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home,” Green said. “Employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers, and warehouse workers.”
A lack of skilled job candidates is costing companies around £2.2 billion in higher salaries and recruitment costs, according to a report from the Open University last month.
For small companies, the average salary increase needed to tempt skilled workers to take the job was £4,150, while the same figure for larger firms was £5,575. The report said that 90% of companies had experienced difficulty hiring workers with the necessary skills in the past 12 months.
“London, in particular, is feeling the Brexit effect,” said Green. Hiring is still growing but at a much slower rate compared with every other region of the UK. Financial services, a crucial part of the London labour market, is not hiring in its usual quantity as the uncertainty caused by Brexit makes companies hesitant.