The booming jobs market shows no signs of abating, according to figures from recruitment agencies that show the fastest rise in jobs placements for more than two years.
Companies shrugged off Brexit uncertainty to increase their permanent staff headcount last month at the quickest pace since April 2015, while temporary hires rose at the fastest rate in almost two and half years.
Kevin Green, chief executive of the Recruitment and Employment Confederation, which will release the figures today, said that the jobs market continued to confound expectations, in part because employers were seeking to lock in European Union employees who may be tempted to leave because of Brexit.
“The economy is slowing, there are signs of increased uncertainty, people are talking about investment decisions being delayed and we are not far away from full employment, yet still employers are hiring. We were quite surprised that [hiring] is so strong,” he said.
With unemployment at a 40-year low, the number of job vacancies rose at the fastest rate since August 2015 last month, as companies struggled to find candidates for the roles being created.
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The confederation said that the availability of workers had continued to “fall sharply” during July. “Employers are finding it very difficult to fill roles,” Mr Green said. “Employers are trying to hang on to people, but if they do lose people, they will hire a temp or contractor to fill the role so they don’t have any gaps, which indicates some level of confidence in orders and customers.”
Businesses are also increasing pay offers to compete for staff, with inflation in starting salaries reaching a 20-month high. This may lead to average pay growth picking up over the medium term.
Mark Carney, the Bank of England governor, said last week that companies were keeping a lid on pay increases until they knew what kind of access they would have to Europe.
However, Mr Green said: “This [report] shows that when employers have a gap in their workforce they are prepared to increase their starting salary.”
The report also reveals that employers are having to adjust to EU workers leaving the UK. “We have 2.2 million people who are European workers in the workforce and we can see they are returning home,” Mr Green said. “People are feeling very unsure of their residency and their right to work here. This is causing significant difficulties for employers, particularly in London.”
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James McGrory, executive director of Open Britain, a campaign group, said: “The negative impact of Brexit is hitting British companies, which are struggling to fill vacancies. To support our economy and our public services, the government needs to make clear that EU citizens are welcome in Britain after Brexit.”