The number of permanent job vacancies is falling despite a rise in starting salaries, according to the KPMG and REC, UK Report on jobs

There has been little change in job availability for over a year due to economic uncertainty. Although the level of vacancies is declining October saw the most gradual slowdown since June. Yet, short term contracts are on the rise due to the flexibility of the shorter-term contracts.

The issue with the job market is not the volume of applicants as this is rising due to an increased number of redundancies as companies restructure their organisations.

Despite an increase in the number of applicants and lack of roles for permanent staff, recruiters said that starting salaries were still rising, however it was the lowest rise in over two years.

With the rise in living costs and the volume of applicant’s, employers are having to up-pay to get the right candidates to fit the role. Short-term contractors have also seen a rise in starting salaries, although not by a significant amount.

The accounting and financial sectors number of permanent positions have fallen from last year but have not been affected dramatically. Short-term contracts in the sector have stayed relatively static.

Construction saw the biggest reduction in permanent positions whilst the retail sector saw the steepest drop in short-term contracts.

Three areas of England saw a decline of permanent positions, with London seeing the severest decrease, along with the north and south. The Midlands experienced a slight increase.

The private sector overall saw an increase in both permanent and temporary positions.

Claire Warnes, partner, skills and productivity at KPMG UK said: ‘The jobs market is facing a cyclical challenge – there are people out there who want to work, and there’s a decent availability of candidates, but they often do not have the right skills for the roles on offer. This means higher starting salaries are still being offered as businesses compete in the ongoing battle for talent.

‘While the rate of decline in permanent placements is the weakest since June – this follows more than a year of cautious hiring due to economic uncertainty and means many businesses are unable to commit to long-term strategies and instead are having to focus on the here and now, by hiring temps.’

Neil Carberry, REC chief executive said: ‘The labour market is marking time waiting for the brakes to be taken off growth by the Bank of England. While permanent hiring is now declining more softly, temporary hiring continues to pick up the slack – with billings gently growing for most of this year on the back of rising wages.’

‘Healthcare providers are ramping up their hiring ahead of winter, but candidate supply is short. Agency medical staff are keeping wards open and getting patients treated.’