The latest KPMG and REC, UK Report on Jobs: Midlands survey saw permanent placements return to expansionary territory and temporary billings fall further midway through the final quarter of 2022. Wage inflation across the Midlands remained marked but softer than the rates recorded over much of the past 18 months. Temp staff availability continued to fall amid reports that candidates were seeking more job stability while candidates available for permanent roles increased for the first time since March 2021. 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. Upturn in permanent placements resumes The seasonally adjusted Permanent Placements Index moved back above the 50.0 no-change mark in November, to signal a renewed increase in permanent staff appointments across the Midlands. That said, relative to the rates recorded over much of the past 18 months, the expansion in permanent staff placements was subdued. While some recruitment consultancies reported that there was a higher demand for permanent staff, others mentioned that economic uncertainty weighed upon hiring decisions. Led by London, three of the four monitored English regions registered a reduction in permanent staff appointments. The Midlands, meanwhile, bucked the wider trend recording a renewed upturn. Softer reduction in temp billings For the third month running, temp billings received by recruiters in the Midlands decreased in November. Anecdotal evidence suggested that the reduction in temporary billings was linked to economic uncertainty and client cautiousness. The pace of decline, however, was only mild and the weakest in the current sequence. A marked upturn in the South of England mainly drove the expansion in temp billings. The North of England and the Midlands, however, registered further downturns. November data signalled slowdowns in the rates of vacancy growth across the Midlands midway through the final quarter of 2022. Though still increasing sharply, the latest rise in permanent staff vacancies was the joint-softest since February 2021. Meanwhile, vacant positions for temporary staff rose at the slowest pace since January 2021. The upturns for both indices each remained weaker than their respective historical averages. First increase in permanent staff availability since March 2021 For the first time in 20 months, the number of candidates available for permanent roles across the Midlands increased midway through the final quarter, albeit only marginally. Anecdotal evidence suggested that the increase was in some cases linked to redundancies, amid economic tightening at firms, as well as candidates seeking to move roles in a bid to secure higher salaries. The downturn was led by the steepest reduction in the North of England since June. Meanwhile, the Midlands bucked the wider trend and was the only monitored English region to register an increase in permanent staff availability, albeit one that was only marginal. Temporary staff availability falls at the slowest pace in 20 months As has been the case since March 2021, the supply of temporary candidates in the Midlands fell in November. Surveyed recruiters frequently attributed the downturn to an increasing number of candidates who seek more stability in permanent placements. That said, the pace of decline was softer than in October and the slowest in 20 months. Three of the four monitored English regions registered drops in temp staff availability with the sharpest decline seen in London. Permanent salary inflation ticks up slightly November data signalled that salaries awarded to new permanent joiners in the Midlands once again rose. The pace of salary inflation, though slightly faster than in October, was the second-softest over the past year-and-a-half. Increasing wages were reportedly driven by general inflation and shortages for skilled labour. While all four monitored English regions reported higher permanent starting salaries, the Midlands recorded the sharpest increase and was the only region with a stronger rate of inflation than in October. Slowest rate of temp wage growth since April 2021 Recruiters based in the Midlands signalled a sustained rise in average hourly rates of pay for short-term staff in November. The rate of wage growth edged down to a 19-month low, dipping below its historical average. Where inflation was concerned, panel members mentioned staff shortages. The North of England recorded the quickest rise in temp pay while the South registered the slowest. Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG UK, said: “Of particular note this month is the rise in permanent placements and starters’ salaries in the Midlands, in sharp contrast to the other three monitored English regions. “This reflects the combined effects of employers recognising that the state of the economy has increased candidate need for job security and additional benefits. However, we expect wage growth to start trending down in the months ahead as businesses start to focus on other factors. “Employers who are able to offer existing workers and candidates opportunities to upskill and reskill, rather than focusing solely on core pay, may well benefit most in this tight jobs market.” Neil Carberry, Chief Executive of the REC, said: “This month’s data emphasises that while employers are moderately more cautious in the face of economic uncertainty, this is not yet a major slowdown in hiring. While permanent recruitment activity in the Midlands bucked the wider trend and increased, the rate of growth has slowed. “In contrast to the national trend, permanent staff availability increased for the first time since 2021 in the Midlands. From discussions with REC members, this is primarily the result of redundancies and candidates looking to move for higher salaries. “As the economic outlook weakens, we can expect to see falls from historic highs across our measures, but it is notable that pay and vacancies are still growing, although at a much lower rate. “A flatter period in the labour market is inevitable in this current economic climate, but demand is being supported by some major underlying factors, including labour shortages and technological change. “The main way to boost performance is to unlock growth by businesses putting their people planning first, as a strategic way to enhance productivity. Government can help through skills and immigration reform. Boosting growth is the only way to ensure a prosperous country for all of us.”