Steve joins Central Technology leadership team
Next stage begins on transformative project at Kings Mill Reservoir
Leicester-based firm secures eight-figure package to support expansion
Final phase of construction underway at Edwalton development
New head of manufacturing in the Midlands for BDO
Artist impressions revealed as landmark Cleethorpes building progresses
Poundland set to acquire 71 wilko sites
Deal done for Derby development opportunity
Law firm BRM Solicitors appoints Director for disputes tam
Economic uncertainty restricts hiring activity in the Midlands
Sustained economic uncertainty and cautious recruitment policies continued to hinder hiring activity in the Midlands, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.
Recruiters registered the sharpest reduction in permanent staff appointments since May 2020 when the COVID-19 pandemic was at its peak. That said, recruiters displayed some confidence in temp billings, which rose for the third consecutive month.
There were marked increases in the availability of both permanent and temporary staff, with the former rising at the steepest rate since December 2020 amid increased redundancies. Pay pressures in the Midlands also strengthened during August, as recruiters mentioned that clients were raising salaries in order to attract staff, although there were mentions that the increased cost of living contributed to staff requesting higher pay levels.
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.
Permanent staff appointments fall markedly
Recruitment consultancies based in the Midlands signalled a reduction in the number of people placed in permanent roles for the ninth consecutive month in August. The rate of contraction accelerated sharply on the month and was the steepest recorded since May 2020. Moreover, the drop in the Midlands was the sharpest of the four monitored English regions.
Anecdotal evidence indicated that permanent appointments fell due to more cautious hiring policies amid economic uncertainty. There were also some reports of candidate shortages.
August survey data signalled a rise in temporary billings in the Midlands for the third month in a row. The rate of increase eased from that seen in July and was the softest in the current sequence, however. The Midlands was the only monitored English region to report higher temp billings in August, which fell marginally across the UK on average.
Midlands-based recruiters signalled a sharp slowdown in permanent vacancy growth midway through the third quarter. Notably, the rate of expansion was the softest seen since February 2021. Growth of demand for permanent staff broadly stagnated at the UK level and was weaker than that seen in the Midlands.
Temp vacancies also expanded at a slower pace during August. The increase was the slowest for three months but slightly stronger than the UK average.
Permanent staff supply expands at fastest pace in 32 months
Adjusted for seasonality, the Permanent Staff Availability Index posted well above the neutral 50.0 threshold to signal an increase in permanent candidate numbers in the Midlands. The rate of growth was robust, the strongest seen since December 2020 and above the national average.
Higher staff supply was mainly linked by recruiters to redundancies, alongside an increase in overseas applicants.
The supply of short-term workers in the Midlands increased again midway through the third quarter, thereby stretching the current sequence of accumulation to four months. The rate of decline eased from that seen in July but remained strong overall. The rise in the Midlands was the second-softest of the four monitored English regions, ahead of the North of England.
Starting salary inflation rises to three-month high
Salaries awarded to new permanent joiners in the Midlands increased again in August. The rate of pay growth accelerated to a three-month high but remained softer than the levels seen over much of the past two years. Recruiters often mentioned that salaries had risen in order to attract suitably skilled staff, alongside increased wage demands from candidates in response to the increased cost of living.
Only recruiters based in the North of England saw a stronger rise in starting salaries than the Midlands.
Average hourly wages for temp staff in the Midlands increased for the thirty-third consecutive month in August. There were a number of reports that greater competition for scarce staff had pushed up wages. The rate of pay inflation was steep and the strongest recorded since March. Temp pay growth in the Midlands was the second-strongest of the monitored regions, behind London.
Commenting on the latest survey results, Kate Holt, people consulting partner for KPMG in the Midlands said: “It is unfortunate to see another month in which the number of permanent job roles has fallen sharply in the midst of continuing economic pressures faced by firms across the Midlands.
“These pressures are hampering hiring plans on a permanent basis but allowing for a rise in temporary roles and positions.
“Another glimmer of hope is that firms are offering up better salaries to potential candidates in an effort to attract them and take into account the cost of living crisis.”
Neil Carberry, REC Chief Executive, said: “August is always a slower month for new permanent roles, but this has been exacerbated in 2023 by the lack of confidence to start the new hiring we saw among firms in the Spring.
“As inflation begins to drop, it is likely that firms will return to the market later in the year – employer surveys suggest confidence may be returning. But for now, the labour market has more slack than it has since the heights of the first lockdown. Firms continue to use temps to fill any short-run needs, with a temp billings rise at a softer pace in August representing little change from the past few months.
“Recruiters routinely describe this sober overall picture as harder, but not necessarily bad. Vacancies are still in a reasonable position. There are huge variations between sectors, too. Hospitality, Accounting, Construction, Blue Collar and Engineering continue to be in demand, meaning employers are still experiencing shortages.
“Demand for permanent healthcare staff in the Midlands continues and across the UK has now risen for 37 months, for instance. In many of these sectors, temporary staff are keeping employers going – including in the NHS, where agencies have been unfairly blamed for failures of training and procurement practice from NHS England. A focus on effective skills reform will be vital to addressing shortages overall in all the shortage sectors.
“With demand weakening, we see the drivers for rising pay being more to do with companies’ pay settlements for existing staff, rather than market demand. Those finding new jobs are benefitting from rises that many firms put in place for their teams earlier in the year. That said, data that covers the whole of the UK shows that pay pressures remain sharp for permanent workers in some sectors driven by ongoing shortages.”
