There has been a record increase in starting salaries at UK businesses this month coinciding with a sharp decrease in the availability of both permanent and temporary members of staff. The number of workers available to fill vacancies has plummeted to an all-time low – especially in the business development and sales sectors.  Other areas where labour shortages are threatening economic growth are engineering and IT.

These findings were featured in a freshly-published report collated by the Recruitment and Employment Confederation (REC).

The reduction in permanent staff availability is the biggest drop recorded since the report was founded in 1997. June also marks the 26th consecutive month whereby salaries have risen as staffing demand has increased due to the lack of suitable candidates to fill various roles.

Kevin Green, CEO of the REC, said: “The message to UK businesses is that it is crucial to sharpen up hiring procedures in an increasingly candidate driven market.

The message to government is that we need to reform the visa system to satisfy immediate demand for skills, whilst stepping up measures to boost the UK skills base for the long-term.”

Regional variation

The Midlands region had the sharpest increase in both permanent and temporary placements in June, while the London market slowed down. The highest demand for staff came from the engineering sector and the construction industry, while hotel and catering was the weakest job market.

Bernard Brown, Partner and Head of Business Services at KPMG, added: “Once again employers seem ready to ‘splash the cash’ in what appears to be a desperate attempt to lure skilled staff from competitors.

“Yet despite offering starting salaries at a rate that has not been seen during the survey’s 17 year lifetime, it is clear that candidates are not easily swayed.”