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Despite temp billings growth slowing slightly, a combination of robust demand for workers and low supply has led to rates of pay increasing sharply.

The KPMG and REC’s latest UK Report on Jobs shows that during February, overall vacancies expanded at the quickest rate for three months in February. This marked the first acceleration of growth since last July and was driven by sharper rises in demand for both contract and permanent staff.

Historically steep rises in vacancies were seen across all eight monitored categories, with the hotel & catering sector top of the list for temporary demand – this was followed by blue collar.

Neil Carberry, Chief Executive of the REC, commented, “Candidate availability has now been dropping for a year, which shows the scale of the labour shortage the UK faces. Recruiters are filling record numbers of posts, but demand is still rising. Those firms that are meeting their needs are working more collaboratively with their recruiters to get their offers to candidates right.

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“Meanwhile, government can help by working with businesses to support people back into the labour market and address skills gaps. At a time when firms and workers are hard-pressed by inflation, making sure businesses can invest in wages and training matters. Ramping up National Insurance is not the right way to go.”

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, added, “While recruitment activity has slowed slightly, employers across all sectors continued to hire energetically during February, as their workloads increased and vacancy growth accelerated for the first time since last summer. But the lack of suitable candidates continued and fuelled yet further increases in starting salaries.”

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