The latest KPMG and REC, UK Report on Jobs: North of England survey highlighted a return to expansion in permanent staff appointments during September. That said, while a positive development following August’s decline, the increase was historically weak. Meanwhile, temp billings grew strongly, suggesting that the market for short-term staff remained robust.
Nonetheless, there was a further slowdown in rates of vacancy growth for both types of staff. Job openings for temporary and permanent workers rose at the slowest pace since February 2021. Candidate availability continued to worsen, however, leading to another steep monthly rise in starting pay across the North of England.
The KPMG and REC, UK Report on Jobs: North of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.
Permanent placements return to growth in September
The seasonally adjusted Permanent Placements Index moved back above the 50.0 no-change mark in September, thus indicating a renewed increase in permanent staff appointments across the North of England. Some recruiters noted a pick-up in skilled candidate availability.
That said, relative to its long-term average (since 1997), the expansion in permanent placements was subdued amid reports of easing demand for staff among clients. Three of the four monitored English regions posted a rise in placements, led by London. The South of England was the only area to record a drop in permanent placements.
Billings received from the employment of short-term staff continued to rise across the North of England in September, extending the current growth sequence that started in July 2020. According to surveyed recruiters, this reflected a generally buoyant market for temporary workers. The rate of growth in temp billings was strong and the fastest of the four monitored English regions.
Report on Jobs data continued to show slowing vacancy growth across the North of England in September.
Permanent job openings rose at the slowest rate since February 2021 and marked an eighth successive easing of monthly vacancy growth. Meanwhile, temporary vacancies also rose at the weakest rate since February 2021.
Nevertheless, demand for both types of staff in the North of England continued to rise at a quicker pace than seen across the other three monitored English regions.
Warren Middleton, Office Senior Partner at KPMG in Manchester, said:
“Permanent placements may have jumped back into growth territory in September, but it will do little to hide the long-term deceleration in activity that we’ve seen across the market in the North. Growth in placements, billings for temporary workers and vacancies have all slowed considerably over the past year. The overall sense of economic uncertainty that many feel is discouraging workers from applying for new roles and to stay put. As for employers, confidence to invest is diminishing.
“Even those that might anticipate that the recession may be short are taking steps now to cut back on spending and considering hiring freezes. But, we expect that employers that continue to invest in their people, particularly upskilling, will be in a stronger position to benefit from the upturn when it comes and will likely have weathered the recession better.”
Permanent availability falls at quickest pace in three months
The number of candidates available for permanent roles in the North of England continued to decrease in September. Furthermore, the extent to which permanent labour supply fell was the strongest in three months and exceeded the declines seen in the other three monitored English regions.
According to surveyed recruiters, there was a reluctance among workers to change jobs in the current economic climate.
The seasonally adjusted Temporary Staff Availability Index recorded below the 50.0 no-change mark in September, signalling a decline in the supply of candidates for temporary positions. Surveyed recruitment consultancies remarked on a lack of skilled workers looking for roles.
However, the deterioration in supply was the weakest since May. Temp candidate numbers also fell at a softer rate across the other three monitored English regions, but these were less severe than that seen in the North of England.
Permanent salary inflation remains elevated in September
Salaries awarded to new permanent joiners in the North of England rose at an elevated pace once again in September. Skills shortages and strong competition for staff were factors reportedly driving up pay.
However, the rate of inflation was unchanged from August’s 14-month low and the weakest of the four monitored English regions. London posted the fastest rise in permanent salaries, just ahead of the Midlands.
Recruitment agencies across the North of England recorded a further monthly increase in temp wages during September. Furthermore, the rate of inflation was the quickest in three months and well above its long-run average.
Higher pay rates were offered in order to attract candidates, although some mentioned increases in line with the rising cost of living. The South of England recorded the fastest pace of wage inflation of the four English regions monitored, with the slowest increase seen in London.
Neil Carberry, Chief Executive of the REC, said:
“The challenges we see in today’s data reflects the underlying shortage of Labour the UK faces. With unemployment at record lows, pay continues to rise for both temporary and permanent workers starting new jobs, and activity levels across the recruitment and staffing industry remain high. While any economic slowdown this winter will affect the market, the extent of shortages mean that hiring will remain a focus for employers.
“The REC has shown that failing to address these issues could cost our economy massively in the years to come. While there is much that Government can do, like reforming the failed Apprenticeship Levy, a lot of the answers lie with hiring businesses. Firms need to work with skilled recruiters on offers that will maximise the skill base we have. There has never been a more important time for business leaders to put the people stuff first.”
