Thursday 08 July 2021 12:07 pm

UK labour supply falls at fastest rate on record in June

Supply of permanent and temporary staff falls at its quickest pace ever in June

The supply of UK workers slid at its fastest rate on record as firms struggle with severe labour shortages, according to a survey released today.

The latest KPMG and REC report on jobs shows supply of both permanent and temporary staff in June fell at its quickest pace since the survey started 24 years ago.

Workers may be reluctant to return to jobs from furlough due to concerns that their role may not be viable in the long term, analysts noted.

Legacy Brexit issue are compounding worker reticence, alongside firms competing with each other to secure talent.

Neil Carberry, Chief Executive of the REC, says: “The jobs market is improving at the fastest pace we have ever seen, but it is still an unpredictable time. We can’t yet tell how much the ending of furlough and greater candidate confidence will help to meet this rising demand for staff.”

“Recruiters are working flat out to fill roles across our economy.”

Vacancies also rose at the quickest pace on record, underlining severe supply and demand imbalances in the labour market.

Firms have been increasing benefits in an attempt to lure workers, with pay growing at their highest rate since July 2014.

Increases to hourly pay rates for short-term staff were the highest since October 2004, indicating that leisure and hospitality businesses are ramping up wages to incentivise workers to take up jobs amid surging consumer demand.

Permanent vacancies in London grew at their highest rate on record.

Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, says: “We need action from businesses and government to reskill and upskill furloughed and prospective workers now more than ever, as the increasing skills gap in the workforce has the potential to slow the UK’s economic recovery.”