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.”
