Sustained economic uncertainty hindered hiring activity in the Midlands at the end of 2023, according to the latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global.

Recruiters registered a first reduction in permanent staff appointments in three months and one of the sharpest since the COVID-19 pandemic. This weakness was also registered with regards to temporary staff, with temp billings falling for the first time in seven months.

There were marked increases in the availability of both permanent and temporary staff, with the former rising at the steepest rate since November 2020 amid increased redundancies and a lack of suitably skilled staff. Pay pressures in the Midlands also strengthened in December, as recruiters mentioned that clients were raising salaries in order to attract staff.

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 first time since September at the end of 2023. The rate of contraction was marked and one of the strongest recorded since the outbreak of the COVID-19 pandemic in early-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 economic uncertainty.

December survey data signalled a moderate reduction in temporary billings in the Midlands for the first time in seven months. Only the South of England saw a sharper contraction than that seen in the Midlands, as recruiters mentioned that some candidates had transitioned to permanent roles.

Midlands-based recruiters signalled slower permanent vacancy growth at the end of the fourth quarter. The rate of expansion was modest and below the average seen across 2023 as a whole. That said, growth of demand for permanent staff in the Midlands was the strongest of the four English regions.

Temp vacancies also rose at a slower pace during December. The increase was modest, yet the second-strongest of the monitored regions behind London.

Permanent staff supply expands at fastest pace for 37 months

Adjusted for seasonal variance, the Permanent Staff Availability Index posted well above the neutral 50.0 threshold to indicate an increase in permanent candidate numbers in the Midlands. The rate of growth was substantial, the strongest seen since November 2020 and the steepest of the four English regions.

Higher staff supply was mainly linked by recruiters to redundancies.

The supply of short-term workers in the Midlands increased again at the end of 2023, thereby stretching the current sequence of accumulation to eight months. The rate of growth slowed sharply from November however, and was the softest since September. The rise in the Midlands was the softest of the four monitored English regions.

Permanent starting salary inflation rises to seven-month high

Salaries awarded to new permanent joiners in the Midlands increased again in December. The rate of pay growth accelerated to the highest since May and was faster than the average for the year as a whole. Recruiters often mentioned that salaries had risen in order to attract staff.

Recruiters in the Midlands saw the strongest rise in starting salaries across the four monitored regions in England.

Average hourly wages for temp staff in the Midlands increased for the thirty-seventh consecutive month in December. There were a number of reports that greater competition for staff had pushed up wages. The rate of pay inflation was robust and the strongest recorded since the start of the year. Temp pay growth in the Midlands was also the strongest of the monitored regions.

Commenting on the latest survey results, Kate Holt, People Consulting Partner for KPMG in the Midlands said: “In keeping with the ebbs and flows of 2023, the Midlands jobs market saw hiring activity restricted due to ongoing economic uncertainty.

“After three months of strong and consecutive growth, December saw a dip when it came to new jobs on offer – an unwanted end of year for those in the jobs market – as well as an unusual dip in temporary roles.

“However, those who did find employment enjoyed a seven-month high in terms of starting salary and temporary workers also benefitted with the highest level of wages since January 2023.

“While the jobs news may not have been the end of year we wanted to see, it can only be hoped that this was a blip and 2024 will, from now on, be a shining light for employment and growth across the Midlands.”

Neil Carberry, REC Chief Executive, said: “Given ongoing economic uncertainty, employers have generally postponed activity into the new year, and the fall in perms appointments in Midlands is likely a blip and the broader signs are generally positive that the region’s labour market is weathering the current economic storm.

“Recruiters went into 2024 with hope that an upturn is coming, based on feedback from clients. Driving this economic growth would be a huge benefit for us all, leading to more successful firms, higher pay, and the ability to cut taxes and fund public services. But the growth must come first.

“The Chancellor has already set a date for the Budget – he should use it to set out steps that set firms free to grow the economy, from skills reform to regulatory change, including a more balanced debate on immigration for work and its impact on growth.

“Rising demand for healthcare staff emphasises again the importance of supporting NHS performance. Recruiters can see the impact on long NHS waiting lists in the supply of candidates looking for work – addressing this will be a key way to tackle inactivity.

“But the plan for NHS staffing needs to deal with 21st Century labour market realities. Medical staff have choices in and power over their careers – working with unions, agencies and other stakeholders on a plan will get the NHS farther than diktat from Whitehall.”

Nottingham City Council has written to the Government to say that it believes the continued retention of an Improvement and Assurance Board with enhanced powers could successfully support its recovery rather than the appointment of Commissioners. The Government had invited representations from the council and other interested parties following its announcement last month that it was minded to intervene at the authority with a proposed intervention package including the appointment of Commissioners. The independent Improvement and Assurance Board has been overseeing improvements at the council since 2021. The Board issued Instructions for specific areas of work which build on the council’s ‘Together for Nottingham’ improvement plan. In a letter to the Government, the council’s Leader, Cllr David Mellen and Chief Executive, Mel Barrett highlighted the significant progress made over the last three years including improving its management arrangements in relation to council owned companies which has led to Nottingham City Homes and Nottingham Revenues and Benefits being brought back in house. They say the council has also demonstrated effective risk management in providing support for the re-opening of Nottingham Castle on a more solid footing after the failure of the independent Trust that had previously operated it and supported the recently concluded financial restructuring of Nottingham Tramlink following the challenges it faced during the Covid pandemic. Progress has been made with partners driving forward devolution arrangements for the East Midlands County Combined Authority which will see a new Mayor elected in May this year, while the work of the council’s Public Health team has been acknowledged nationally. Improvements being made in children’s services supported by the Department for Education have been noted by Ofsted in their recent monitoring visits. Significant measures are being taken in relation to the council’s financial sustainability with robust action in managing the in-year position as well as the 2024/25 budget and Medium-Term Financial Plan. Spending controls introduced as part of the Section 114 (3) report will continue to 31 March 2025 and the council is currently consulting on £35 million of proposed cuts, including a proposed reduction of 500 posts. The Leader and Chief Executive’s response concludes by saying: “Our resolve to continue to drive improvement remains undiminished. We have valued the support and challenge of the Improvement and Assurance Board over the time we have spent working together. “Given the depth of knowledge and working relationships built up between the Council and the Improvement and Assurance Board members, we believe that the continued retention of that structure with enhanced powers could successfully support the Council’s recovery, and we have previously indicated a preference for that arrangement rather than the appointment of Commissioners.” The council letter went on to acknowledge that a decision on the appointment of Commissioners is one for the Secretary of State to make but asked that if a decision to appoint Commissioners is to be made that it is done so expeditiously and that a period of transition with the existing Improvement and Assurance Board is incorporated, so that the change to increased intervention can be managed as seamlessly as possible.

It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.  It has become something of a tradition, given that we’ve been doing this now for over 30 years. Here we speak to Richard Sutton, MD at NG Chartered Surveyors. Looking at 2024 as a whole and with inflation seemingly under control, I’d put confidence in a more positive year ahead market-wise – particularly if, as is predicted (and somewhat hoped) interest rates start to come down. However, with a potential general election ahead, noticeable growth is unfortunately likely to be impacted until a result is known.

If inflation stays under control after a slow start to 2024 I predict the middle two quarters will be solid – very much like 2018 trading conditions.
 
In the commercial property world, opportunities are still scarce but there is still a willingness out there to do deals.

The office market still needs to make its mind up and, to be honest, it’s about time more people came back to the office.

As the phrase goes: “use it or lose it.”

I also think there will be a big trend from solicitors and accountants moving from landmark buildings with massive cost implications to high-end serviced office space.