The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, indicated that the Midlands saw a renewed reduction in permanent placements at the end of the second quarter. Furthermore, the rate of decline was the strongest since January and marked overall.
At the same time, temp billings rose only fractionally. Meanwhile, recruiters signalled steeper upturns in candidate availability for both permanent and temporary roles, but rates of pay growth softened during June. In fact, the latest increases in permanent salaries and temp wages were the softest in six and seven months, respectively.
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.
Sharpest fall in permanent placements since January
June data pointed to a renewed reduction in permanent placements in the Midlands that was the twelfth recorded in the past 13 months. The rate of decline was steep and the most pronounced since the start of the year. According to respondents, a range of factors dampened permanent staff hiring, including lower vacancies, reduced business confidence and a lack of suitable candidates.
The Midlands recorded the second-softest reduction in permanent placements across the four monitored English areas, behind the North of England.
For the second consecutive month, temp billings rose in the Midlands at the end of the second quarter. Where an increase was reported, recruiters mentioned stronger demand for temporary staff. That said, the rate of expansion was only fractional overall.
Nevertheless, the Midlands was the only monitored English region to record an uplift in temp billings in June.
Demand for permanent workers in the Midlands declined during June and to a greater extent than that seen in May. The rate of reduction was solid overall, though the Midlands posted the softest fall of the four monitored English regions.
Demand for short-term staff, on the other hand, rose for the second successive month in June. The rate of increase was solid, and the most pronounced since April 2024. The Midlands was the only region to post an uptick in temp vacancies.
Sharper increase in permanent candidate numbers
Redundancies reportedly led permanent staff availability to increase markedly in June. The number of candidates rose for the twenty-seventh month running, with the latest upturn the strongest since December 2023.
The increase in the Midlands was the second-softest of the four English regions monitored by the survey, after the North of England.
The rate of increase in temporary candidate numbers strengthened in June and was rapid overall. As was the case for permanent labour supply, the upturn in candidate availability for temporary positions was mainly linked to redundancies.
The rise in the Midlands was slightly softer than that seen across the UK as a whole, however.
Permanent salaries rise at softer pace
As has been the case since March 2021, starting salaries for permanent workers in the Midlands rose at the end of the second quarter. Panellists reported that the increase partly reflected competition for scarce candidates.
The rate of inflation was moderate, however, and the softest in 2025 to date. That said, only London saw a steeper rate of starting salary inflation than the Midlands.
Hourly pay rates for temporary staff increased for the seventh successive month during June. That said, the rate of wage inflation eased sharply from May and was the softest seen over this period.
The rate of temp pay growth in the Midlands was also slower than the average seen at the UK level.
Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG in the Midlands said: “The Midlands saw a renewed drop in permanent placements in June – the sharpest since January – as reduced vacancies, economic uncertainty and candidate shortages continued to weigh on hiring decisions.
“Temporary hiring held firmer, with the Midlands being the only region to record an uptick in temporary billings and vacancies. This suggests employers are leaning on flexible staffing while holding back on permanent headcount growth. Meanwhile, increased redundancies have led to rising candidate availability, in turn broadening the talent pool and easing pay pressures.
“For employers in the Midlands, this is an opportunity to re-evaluate recruitment strategies and tap into a growing supply of skilled candidates amid shifting market dynamics.”
Neil Carberry, REC chief executive, said: “The labour market is sending mixed messages month to month, suggesting employers are taking a practical and conservative approach, hiring more when they need to, rather than when they want to. Much of that hesitation stems from the scar tissue left by the Spring tax hikes. That same uncertainty is helping temp billings to rise in the Midlands, and demand for short-term staff was up for the second successive month in June.
“Across the UK, this turn to temps is benefitting people looking for work in construction, blue-collar roles, engineering, and healthcare. But even so, the picture for retail jobs is difficult, and there is still no bounce-back in IT hiring.
“Clarity and transparency from government is vital to build trust with business and drive recovery. The new roadmap for the Employment Rights Bill allows for full and frank consultation on how the new rules will be shaped and gives breathing space to embattled businesses. Updating workplace protections is important, but striking the right balance with the business growth ambitions is the crucial part.”
