The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, revealed the Midlands as an outperformer in terms of hiring during October. The Midlands was the only English region to record a rise in permanent staff appointments, contrasting with the strong downturn seen at the UK level, while temporary billings growth also outpaced that seen at the national level.
Signs of softness were nevertheless apparent as candidate availability rose markedly, while job vacancy growth remained considerably weaker than those seen in the first half of 2023. In turn, rates of increase in permanent starting pay and temp wages were slower than seen on average across the survey history.
The KPMG and REC, UK Report on Jobs: Midlands is compiled by S&P Global from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.
Midlands bucks UK-wide trend with permanent placements growth
For the first time since November last year, the seasonally adjusted Permanent Placements Index posted above the 50.0 no-change mark, signalling a return to growth in permanent staff appointments across the Midlands at the start of the fourth quarter. The upturn was linked to stronger demand, according to surveyed recruiters.
Although the expansion was only marginal, it was a marked contrast to the strong contraction seen at the UK level. Indeed, the Midlands was the only monitored English region to register an expansion in October.
Billings received from the employment of short-term staff by recruiters in the Midlands continued to increase in October, extending the current sequence of expansion to five months. While the upturn lost momentum, it was slightly stronger than that seen for the UK as whole. Compared to the other three monitored English regions, only London recorded a quicker rate of growth.
October Report on Jobs data continued to signal much softer appetite for hiring across the Midlands compared to the trend seen in the first half of the year.
That said, the number of permanent job openings across the region rose further and at a stronger pace during October, contrasting with a fractional drop at the UK level.
Demand for temporary staff rose at the softest pace seen across the current three-year sequence of improvement.
Second-fastest rise in permanent labour supply in nearly three years
Amid reports of redundancies, October survey data signalled a marked and accelerated improvement in permanent candidate availability across the Midlands. Furthermore, the upturn was the second-fastest since December 2020.
Compared to the other three monitored English regions, only London recorded a stronger expansion in permanent labour supply.
The seasonally adjusted Temporary Staff Availability Index moved further above the 50.0 no-change threshold in October, signalling a faster improvement in the supply of people available for short-term work across the Midlands. Surveyed recruiters noted a greater willingness among candidates to look for new roles.
The upturn seen in the Midlands was narrowly weaker than that seen for the UK as a whole.
Starting salary growth remains weaker than long-run average
While October Report on Jobs data signalled a sustained rise in salaries awarded to new permanent joiners across the Midlands, and one that was slightly faster than previously, the overall rate of inflation remained weaker than the long-run average.
Competition for candidates continued to exert upward pressure on pay, according to recruiters, although squeezed employer budgets and improved supply reportedly acted to restrict salary growth.
London continued to lead the permanent starting pay growth at the English regional level.
Wage rates for temporary work rose again across the Midlands in October, in line with the trend seen since the end of 2020, although the rate of inflation slowed to a 32-month low. The Midlands also saw the slowest rise in hourly pay rates of the four monitored English regions.
Commenting on the latest survey results, Kate Holt, people consulting partner for KPMG in the Midlands, said: “It is great to see that, after a challenging few months for the Midlands, the area has seen a return to growth when it comes to permanent jobs, especially when the rest of the country is experiencing a downturn.
“The figures have been further boosted by a continuing rise in temporary roles also, allowing for positive news for jobseekers in the run up to the festive season.”
Neil Carberry, REC Chief Executive, said: “In many ways, the labour market is marking time waiting for the brakes to be taken off growth by the Bank of England.
“While permanent hiring bucked the national trend by growing marginally, temporary hiring is strong and continues to pick up the slack – with billings gently growing for most of the second half of the year on the back of rising wages.
“While the rate of pay growth has now returned to more normal parameters, it is still strong, especially in sectors where staff remain in short supply in Midlands, such as blue collar and hospitality.
“Looking to the Autumn Statement, businesses and Government need to be aware that the return of growth will reveal shortages more widely – action on skills, welfare-to-work programmes and immigration reform will be needed to prevent a return to growth being squandered.
“Healthcare providers are ramping up their hiring ahead of the winter, but candidate supply is short. Agency medical staff are keeping wards open and getting patients treated – they need a bit more support from Government.
“Reforming capped on-framework agency rates so pay for temps working on-framework can rise for the first time in four years will save Government money as they will end up using far fewer emergency shifts, and it will reward a part of the NHS workforce that is too often overlooked.”
