UK firms hire staff at fastest rate in 2 years

UK businesses hired new staff at the fastest pace in more than two years in July, although employers are finding it increasingly difficult to recruit workers, a new survey has suggested.

A poll of 400 recruitment firms by IHS Markit and the Recruitment and Employment Confederation (REC) showed that permanent placements increased by the most since April 2015, while growth in temp billings improved to a nearly two-and-a-half year high.

However, the availability of permanent staff declined further during the month, while the availability of temporary staff fell at the quickest pace in just over a year-and-a-half.

The UK unemployment rate is at its lowest level since records began in 1975, making it more time consuming for businesses to recruit staff as there are fewer qualified people available for those jobs.

Migrants from the European Union are also increasingly reluctant to take up new jobs in the UK amid uncertainty over Brexit negotiations and their future right to reside in the country, exacerbating a shortage of skilled workers.

"It's clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks," said REC chief executive Kevin Green.

"The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home. Employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers."

London in particular was feeling the Brexit effect, with hiring in the capital growing at a much slower rate compared to every other region in the UK.

Starting salaries for both permanent and temporary staff increased in July as the availability of suitable candidates continued to dwindle.

"We can't ignore the importance of our relationship with the EU to employers," Green added. "If we want to keep our jobs market successful and vibrant, we must make it easier, not harder, for employers to access the people they need."