As the number of businesses looking to hire soar, starting salaries for both temporary and permanent workers have risen at the greatest speed in 24 years.

According to new research released by the Recruitment and Employment Confederation (REC), hiring has continued to rise rapidly at the end of the third quarter, due to continued demand for staff and rising economic activity.

As candidate availability has declined, this has driven businesses to offer higher starting pay as acquiring top talent becomes more competitive.

Both permanent and temporary staff have seen the fastest increase in starting salary in 24 years.

Alongside this, hiring for permanent staff continued at a pace which was only slightly slower than August’s all-time record.

Although the same could not be said for temporary roles, where hiring dipped to a five-month low, improved market confidence was felt across the board.

The decline in the availability of staff was thought to be due to a number of factors including a greater demand for staff, a generally high employment rate, fewer EU workers and a lack of confidence among employees to switch roles due to the pandemic.

IT and Computing employees were the most in-demand type of permanent staff in September, just ahead of Hotel & Catering.

Conversely, executive/professional saw the slowest rise in temp vacancies.

However, this data, reflecting the hiring rate over the month of September, does not take into account what impact the end of the furlough scheme may have on the labour market.

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said:

This month’s unprecedented increase in starting salaries – the highest in 24 years – is being driven by the near record fall in candidate availability.

While higher salaries are good for job seekers, wage growth alone is unlikely to help sustain economic recovery because of limited levers to bring people with the right skills to where the jobs are and increase productivity.

The end of the furlough scheme should be bringing tens of thousands of new people to the jobs market, but many do not have the right skills to transfer to the sectors with most demand.

 Reskilling and supporting people to move jobs which are in demand needs to be speeded up. Otherwise we may see these clear tensions in the labour market turning into a workforce crisis in many sectors.

Neil Carberry, Chief Executive of the REC, suggested how this problem could be remedied:

It is essential that government works in partnership with business to deliver sustainable growth and rising wages, rather than a crisis-driven sugar rush.

That includes working on policies that encourage business investment, an international outlook and skills development, especially at Levels 1 and 2 where shortages are most acute – this will also help unemployed young people get into work.

*The KPMG and REC, UK Report on Jobs is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies and reflected on data from September 2021.





Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.