The rate of growth of placements and temporary/contract staff billings fell in March, according to the latest ‘Report on Jobs’ from the Recruitment & Employment Confederation (REC) and KPMG.

However, March also saw a stronger increase in demand for staff, while the month also saw the fastest rise in permanent salaries for eight months.

Kevin Green, chief executive of the REC, says: “The jobs market is still growing but at a slower rate than in February. The report again highlights that the UK has a two-speed labour market, with the private sector creating jobs as the public sector reduces employment.

“The good news is that vacancies are rising at their highest rate since April last year and March is the 11th consecutive month that vacancies have grown. This demonstrates increasing demand for new staff from private sector businesses. 

“What is concerning is the increase in starting salaries for permanent staff, which is due to two factors. Firstly, people changing jobs are clearly looking for higher pay to compensate for inflation and secondly, the growing competition for quality candidates in some sectors such as IT, engineering and finance.

“While it’s important to reward quality candidates appropriately, it’s important that this trend doesn’t limit opportunities for job creation or hinder business growth in the future.”