The month of May saw a record upturn in permanent staff appointments, the fastest increase in billings for temporary staff since January 2014, and a record fall in the rate of permanent candidate availability, according to the latest compiled by IHS Markit.

Kate Shoesmith, deputy CEO of the Recruitment and Employment Confederation (REC), said: “We now have a consistent picture over the past few months to show that confidence is growing and hiring plans are in motion. The data is mirroring exactly what recruiters tell us daily. ”

But she also called on the Government to do more to address skills shortages, saying: “Now is the time for action.”

The North of England’s upturn in permanent staff appointments came amid reports of surging staff demand due to looser Covid-19 measures and more favourable economic conditions.

The rate of increase quickened noticeably since April and was the most marked on record, outstripping that seen in the other English regions monitored, the South, Midlands and London.

Similar reasons lay behind the eleventh consecutive monthly increase in billings received from the employment of temporary staff, which survey panellists attributed to the easing of lockdown restrictions and greater demand for temp staff.

The number of permanent vacancies rose for the fourth straight month – the fastest rate since November 1997 – and the rise in temporary staff vacancies was the joint-steepest on record.

The corollary of this was a steep reduction in permanent candidate availability in May. The respective seasonally adjusted index shed nearly 12 points on the month – the quickest fall on record.

There was also a more pronounced drop in the supply of temporary candidates in the North. Respondents cited increased demand for candidates, the Government’s furlough scheme and uncertainty surrounding changing roles. The rate of reduction in temp staff availability was the second-fastest on record, behind only the first month in the survey’s history, October 1997.

As demand for staff increased, pay pressures increased. Strong competition saw starting salaries rise at the fastest rate since June 2018, and hourly rates for temporary staff increase more quickly than at any time since August 2019.

Ms Shoesmith said: “In the North, permanent placements are growing at the fastest pace we’ve ever seen, and temp bill-ings at the quickest since 2014.

“So now is the time for action. With demand spiking, the skills and labour shortages that already existed in the UK have come into sharper focus – and Covid has only made them worse. This is the most pressing issue in the jobs market right now, and has the potential to slow down the recovery. Employers must think about how they can attract the staff they need, for example by looking at the wage and benefits package on offer – there is particular demand for more flexible and hybrid work.

“But Government also needs to urgently look at improving access to work and opportunities for everyone to participate in training that will lead to a job. This should start with careers information that signals where job openings are being created and funding for the relevant work-related training.”

Warren Middleton, office senior partner for KPMG, echoed Ms Shoesmith’s call to address the skills gap: “While it is great to see so many businesses advertising their roles across the region to meet the surge in demand, we must do more to encourage those who have lost jobs in the pandemic to consider working in a different sector.

“Businesses in the North should look at how they can retrain workers to help fill the gap left by the lack of candidate availability.”