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Shrinking Candidate Availability Pushed Up Temp Salaries In April

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April was another good month for the temp/contract labour market, as revealed by the latest REC/KPMG Report on Jobs. Temp billings kept rising at a brisk pace and temp pay rates grew at an accelerated rate compared to March. However, there is a serious problem facing employers, namely the steady decline in candidate availability. This shortage is actually the reason for the salary growth, rather than rising business confidence as a result of the strengthening economy, the report notes.

Temporary workers were particularly popular with public sector organisations

Candidate availability in the temp/contract worker category registered its sharpest decline since December 2000. This proved a problem as the number of advertised vacancies continued to increase. Temporary workers were particularly popular with public sector organisations: temp vacancies in the public sector rose at a stronger rate than the corresponding figure for permanent staff.

As for professional categories, engineers were in highest demand among temp/contract workers in April. The second most sought-after professionals were nursing/medical/care staff. The REC and KPMG established that temp vacancies recorded strong growth in all categories.

Commenting on the results, REC head Kevin Green said that the steep decline in candidate availability was forcing employers to offer a higher starting salary. However, this is unlikely to work for much longer as job seekers enjoy a much greater choice.

The issue of talent shortage was also raised by KPMG partner Bernard Brown, who said that employers should consider matters from a longer-term perspective. Even though they are scrambling to fill positions, companies continue to chase workers with established professional credentials, paying little or no attention to new labour market entrants. This may further exacerbate the talent problem as young professionals are deprived of the chance to demonstrate their abilities, Brown added.