The latest KPMG and REC, UK Report on Jobs: Midlands survey highlighted a further steep expansion in permanent placements in March, and one that was the sharpest since the end of 2021.
Meanwhile, temporary billings rose for the twenty-first month in a row. The rise in permanent salaries eased for the second month running to the softest since last September, though inflation of hourly pay rates for temporary staff accelerated to a four-month high. Finally, skilled staff shortages contributed to the sharpest reduction in permanent candidate availability since last October.
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.
Further rapid rise in permanent placements
The rate of growth in permanent placements across the Midlands quickened at the end of the first quarter. The increase was rapid overall and the sharpest seen since last December. Recruitment consultancies indicated that placements had risen following stronger demand for permanent staff from clients amid sustained shortages.
The increase in the Midlands was the fastest of the four monitored English regions.
March data pointed to a continued increase in temporary billings in the Midlands. The rate of expansion quickened from February and extended the current sequence to 21 months. Respondents suggested that clients were becoming increasingly confident to fill vacancies with temporary staff, while there was some evidence that more temporary workers were available.
Growth in temp billings in the Midlands was the second-fastest of the monitored regions, behind London.
Permanent vacancies increased at a marked pace in the Midlands during March. The rate of increase quickened for the second month running and led to the sharpest rise in permanent vacancies for four months, yet was the slowest of the four monitored English regions.
Demand for temporary staff also rose steeply in the latest survey period. The pace of expansion accelerated from February to the quickest since last August.
Sharper decline in permanent candidate numbers
The Midlands saw a further reduction in the supply of permanent candidates during March. The rate of the decrease quickened to the fastest since last October. Anecdotal evidence suggested that people in work were reluctant to move at present, while some recruiters cited shortages of suitably experienced staff for permanent roles. At the national level, the reduction in the availability of permanent staff was quicker than that seen in the Midlands.
Recruitment consultancies indicated that temporary candidate numbers decreased at a marked pace in March. That said, the pace of reduction slowed from February to reach the softest for ten months. A number of respondents indicated that skills shortages had contributed to the lack of available staff for temp roles.
Permanent salary growth eases for second month running
Permanent salaries for new joiners in the Midlands increased for the thirteenth month in a row in March. While historically elevated, the rate of inflation eased to the softest since last September. A combination of a lack of suitable candidates and pressure on recruiters due to higher costs of living were behind the increase in permanent salaries. The rise in permanent salaries in the Midlands was the slowest of the four English regions covered, however.
Pay rates for temporary staff rose sharply during March. The rate of inflation accelerated for the first time in four months and was the quickest since November 2021. Recruitment consultancies indicated that candidate supply shortages had been a leading factor behind higher pay rates.
Moreover, the increase in the Midlands was the second-quickest of the four monitored English regions, behind the North of England.
Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG UK, said: “The Midlands saw a rapid rise in job vacancies during March, albeit at a slower rate than the North, South and London regions.
“The dwindling supply of candidates is frustrating employers, not just those that are looking to grow, but also those simply trying to replace staff who might have left through the pandemic. This presents more worry for businesses, many of which are already tackling a myriad of challenges, not least the incredible rise in operating costs as inflation rises.
“The Midlands has long been known for its resilience and job seekers in the region should take hear that the market is creating attractive opportunities for candidates. Unfortunately, many businesses may struggle to offer competitive enough salaries that can meet expectations.”
Neil Carberry, Chief Executive of the REC, said: “We can clearly see that labour and skills shortages are driving inflation in these latest figures. Starting salaries for permanent staff are continuing to grow rapidly, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices.
“Record COVID infection levels are also pushing up demand for temporary workers, particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates.
“However, the overall number of permanent placements being made has stabilised in recent months. This is no surprise after a period of historically high growth, and in the face of more economic uncertainty.
“Even so, the jobs market is very tight. Businesses will need to broaden their searches and be creative in making their offer to candidates more attractive, in consultation with recruitment experts. But government can help by incentivising investment in skills and people during the inflation crisis.”
