The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, indicated that the number of permanent staff placements in the Midlands rose for the first time in a year during May. Though only slight, the upturn coincided with a renewed increase in temp billings that was the strongest in six months.
Demand for permanent staff meanwhile contracted at the slowest pace in nine months and only marginally, while temp staff vacancies rose for the first time since last August. Concurrently, the supply of both permanent and temporary staff continued to rise sharply. On the pay front, the rate of permanent salary inflation was solid in May, though the increase remained slower than the historical average. At the same time, temp pay rose at the quickest pace for 12 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.
Renewed increase in permanent staff appointments
The number of people placed into permanent roles rose across the Midlands in May, marking the first increase in exactly one year. Recruiters often linked the marginal uptick to the filling of vacancies. However, there were also reports that higher employment costs had weighed on the overall upturn in hiring.
Of the four monitored English regions, the Midlands was the only area to record an increase in permanent placements during May.
May data indicated that billings received from the employment of temporary staff in the Midlands increased for the first time in four months. While consistent with only a modest rate of growth, the respective seasonally adjusted index posted the highest reading since last November. Recruiters mentioned that firmer demand for short-term staff and new projects had helped to lift billings. As was the case with permanent placements, the Midlands was the only monitored English region to post a rise in temp billings.
Latest data pointed to a twelfth consecutive monthly decrease in demand for permanent staff in the Midlands. The pace of reduction eased sharply from April, however, and was only marginal. Of the four monitored English regions, the Midlands saw the softest fall in permanent vacancies.
Temp vacancies rose for the first time in nine months in May. The rise was marginal, but the most pronounced since last July. Moreover, the Midlands was the only English region monitored by the survey to see a rise in temp staff demand.
Permanent staff availability continues to rise at marked rate
Adjusted for seasonal factors, the Permanent Staff Availability Index signalled a twenty-sixth successive monthly increase in permanent candidate numbers in May. There were reports that the uplift in staff supply was due to redundancies and reduced hiring activity.
The rise in permanent labour supply in the Midlands was the second-softest of the four monitored English regions, behind London.
Temp staff availability across the Midlands picked up again midway through the second quarter, extending the current sequence of growth to 25 months. Recruiters mentioned that redundancies and fewer available temporary contracts had pushed candidate numbers higher. The rate of expansion quickened from April and was the strongest since last November.
The supply of temporary staff rose sharply across all four monitored English areas in May, led by London.
Starting salary inflation remains solid in May
Recruiters across the Midlands continued to record an increase in starting salaries for permanent workers in May, thereby stretching the current sequence of pay growth which began in March 2021. Some panellists mentioned that the rise was due to higher salaries being offered to attract suitably-skilled staff. The rate of inflation was little-changed from the previous survey period and solid overall.
The Midlands recorded the second-strongest increase in permanent pay of the four monitored English regions, behind London.
Average hourly pay for short-term staff rose for the sixth successive month midway through the second quarter. Where temp wages increased, anecdotal evidence suggested that this was due to stronger than average increases in the National Minimum and Living Wage rates. The rate of increase was the steepest for 12 months and sharp.
On a regional basis, only the North of England posted a steeper increase in temp pay than that seen in the Midlands.
Commenting on the latest survey results, Marc Abrams, Nottingham Office Senior Partner at KPMG UK said: “May brought a more positive shift in the Midlands’ labour market, with permanent staff appointments rising for the first time in a year – making it the only English region to see growth during the month. There was also a positive trend in temp billings, which increased as they were supported by stronger short-term demand and new project activity.
“Permanent vacancy numbers continued to fall, but at a much slower pace, while temporary vacancies rose for the first time since last summer. Both shifts indicate that employer confidence is starting to return, though still cautiously.
“For businesses across the Midlands, now is a timely moment to reassess workforce strategies. With an expanding talent pool and signs of stabilisation, the region’s firms are well-placed to invest in their people, while also planning for longer-term growth.”
Neil Carberry, REC Chief Executive, said: “More encouraging signs for the UK in temp billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year. The Midlands is leading these early signs of promise, with its first increase in permanent placements in a year and a rise in billings after four months of decline.
“The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action. The Spending Review delivered a big hit in terms of eye-catching spending on technology and energy, but the lack of announcements on workforce matters is badly out of step with its desire to build a deep pool of talent.
“With the Industrial Strategy imminent, businesses are looking for more than talk of renewal, they want a clear plan for an economic revival. One that acknowledges the central role of good workforce policy – beyond just employment rights. That means putting workforce matters at the heart of the agenda, not treating it as a compliance issue.”
