The threat of Brexit has prompted a "marked decline" in staff for British businesses, forcing pay up in some sectors, a new jobs report has said.
The availability of both permanent and temporary staff fell sharply in July, with the availability of temps declining at the fastest pace in just over a year and a half, according to the Recruitment and Employment Confederation.
Availability dropped while overall demand for staff rose to its joint-strongest in 23 months, on a par with May 2017.
Permanent placements have reached a 27-month high, while temp billings have reached their highest in nearly two and a half years, according to the Markit/REC Report published this morning.
As a result, starting salaries for permanent candidates rose to a 20-month record, while hourly pay rates also increased "sharply", the report said.
The strongest upturn in permanent placements was recorded in the Midlands, followed closely by the North of England. The weakest increase was seen in London, where growth softened to an eight-month low.
All monitored regions saw sharp increases in temp billings during July, led by the North of England.
There were sharp increases for permanent staff across all sectors, led by engineering and followed by accounting/financial and IT & computing.
Blue collar roles recorded the quickest upturn in temporary staff demand of all nine job categories in July. Hotel & catering and nursing/medical/care also saw steep increases in demand, while executive/professional came at the bottom of the table.
Kevin Green, REC chief executive, said employers were feeling the impact of Brexit already.
“It's clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks," he said. "UK employment remains at an all-time high and looks set to keep improving. 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 is feeling the Brexit effect. Hiring is still growing but at a much slower rate compared with every other region of the UK. Financial services, a crucial part of the London labour market, are not hiring in their usual quantity as the uncertainty caused by Brexit makes them hesitant.
“We can’t ignore the importance of our relationship with the EU to employers. 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.”
Businesses have long been concerned about what Brexit would mean for staff hiring. Back in March, Pret claimed that just one in 50 applications came from British job-seekers. More recently, business leaders slammed government's commitment to ending free movement of labour from next March.