The latest KPMG and REC, UK Report on Jobs: Midlands survey, compiled by S&P Global, indicated that permanent placements in the Midlands continued to fall markedly in July amid reports of lower demand for workers and concerns over the economic outlook.
At the same time, temp billings fell for the first time in three months, and at the quickest rate in one-and-a-half years.
The decline in hiring activity contributed to further steep increases in candidate availability for both permanent and temporary roles. Improved candidate numbers also reduced pressure on pay, with both starting salaries and temp wages rising only marginally.
Vacancies data meanwhile showed that demand for permanent staff fell at a sharper pace, while temp staff demand dropped for the first time in three months.
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.
Sharp decrease in permanent placements
Permanent placements fell in the Midlands for the second successive month in July. The rate of decrease was little-changed from that seen in June and sharp overall. Survey respondents indicated that weaker confidence around the outlook and lower job postings had weighed on permanent staff appointments.
However, the reduction seen in the Midlands was the softest of the four monitored English regions.
Recruiters in the Midlands recorded a renewed decrease in temporary billings at the start of the third quarter, marking the first fall in three months. The rate of reduction was the strongest since January 2024 and sharp.
Anecdotal evidence suggested that lower demand for temp workers and higher staffing costs had weighed on billings. That said, the fall in the Midlands was softer than the national average, with only the South of England posting a weaker rate of decline.
Demand for permanent staff in the Midlands fell for the fourteenth month running in July, and at the most pronounced rate since February. The Midlands saw a slightly softer fall in permanent vacancies than that seen on average across the UK as a whole, however.
There was a decline in demand for temporary workers in the Midlands for the first time in three months during July, albeit one that was modest overall. Moreover, the pace of reduction in the Midlands was softer than those seen across the three other monitored English regions.
Sustained upturn in permanent candidate numbers
The number of candidates available for permanent roles in the Midlands increased markedly during July, with the latest uptick extending the current sequence of expansion to 28 months.
The rate of growth eased only slightly from June’s one-and-a-half-year record, and was broadly in line with the UK-wide trend. Panellists indicated that redundancies had been a key factor pushing up candidate supply.
Recruitment consultancies in the Midlands reported that a lack of temp job opportunities and redundancies contributed to a further rise in temp candidate availability in July. The rate of increase remained historically marked, despite easing to a three-month low.
The Midlands posted the slowest rise in temporary staff availability of the four monitored English regions, however.
Slowest rise in starting salaries for nearly four-and-a-half years
Salaries for new permanent joiners in the Midlands continued to rise during July. The pace of salary inflation slowed sharply, however, and was the weakest seen since the current period of pay growth began in March 2021.
The rise in permanent salaries in the Midlands was also weaker than the UK average. Recruiters often indicated that higher salaries were offered to attract suitably skilled staff. However, others noted that improved candidate availability had dampened overall growth.
Recruitment consultancies in the Midlands signalled a further increase in temp pay at the start of the third quarter. The rate of inflation was only marginal, however, and the softest recorded in the current eight-month sequence of rising pay. Moreover, the Midlands saw a slightly slower increase in temp wages than that seen at the national level.
Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG in the Midlands said: “Hiring conditions in the Midlands remain tough, but employers are responding with agility. With permanent recruitment under pressure, firms are leaning into temporary hiring, and the Midlands is leading the way. We were the only region that saw a rise in temp billings and short-term vacancies across England.
“At the same time, a growing pool of available talent is giving businesses the chance to rethink how and where they invest. We’re seeing a clear shift in focus toward retaining core teams and building flexibility into future workforce planning.”
Kate Shoesmith, REC deputy chief executive, said: “There is a path to jobs market recovery – but it will take co-ordinated action from Government, the Bank of England and business to maximise on any potential upswing.
“With starting salaries and temp pay rising in the Midlands but only modestly, it was right to cut interest rates last week. More action like this, to stabilise the business cost-base, is what will support growth and boost the jobs market this year. That is what the Chancellor should be keeping firmly in mind when preparing this year’s Autumn Budget.
“Fluctuations in permanent and temporary job placements in the Midlands signal a labour market that remains resilient but uneven. Across the UK, construction, a key economic bellwether, has seen a rise in temp vacancies, an early sign of confidence returning. Demand for blue-collar temp roles and permanent engineering jobs in the UK also remains steady across the country, offering another glimmer of optimism.
“At the same time, hiring in retail and hospitality are down in the UK. Employers in these sectors are pausing due to cost pressures and uncertainty around employment law, although when the turn comes, these industries typically rebound quickly.
“Meanwhile, widespread skills shortages remain in the Midlands for permanent and temporary staff, which indicates the need for urgent support from government to upskill and retrain people; while businesses need to act now to secure the talent they will require when hiring picks up later this year, as our separate employer sentiment surveys suggest it will.”
