The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, pointed to a second consecutive monthly increase in permanent placements in the Midlands, contrasting with the UK-wide trend. Temporary billings were also up amid improving demand for staff and marked increases in candidate availability. Rates of pay inflation quickened from the previous survey period, but remained below-average.
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.
Modest increase in permanent placements
Permanent placements rose in the Midlands for the second month running in November. The rate of expansion was modest, but quickened from October. Moreover, the Midlands was the only English region to record an expansion in permanent placements over the month. The decline in the UK was driven by a severe reduction in permanent placements in London.
Some respondents in the Midlands indicated that good availability of candidates had contributed to the latest rise in placements.
Although recruiters in the Midlands continued to record an increase in temporary billings midway through the final quarter of the year, the rate of expansion was only marginal and the softest in the current six-month sequence of growth.
The expansion in the Midlands compared favourably with a decline at the UK level, with the North of England the only other English region to see a rise.
Demand for staff in the Midlands improved solidly during November.
Permanent vacancies increased for the thirty-fourth consecutive month and at the fastest pace since July. The rise in the Midlands was also the most pronounced of the four English regions covered.
The rate of growth in demand for temporary workers also quickened from the previous survey period. As with permanent vacancies, the Midlands was the best performing English region.
Rapid increase in permanent candidate numbers
The number of candidates available for permanent roles increased sharply in November, with the latest rise the most marked in almost three years. The improvement in the Midlands was slightly stronger than the UK average, while marked increases were seen across each of the four English regions.
A number of respondents indicated that redundancies had been behind the rise in candidate numbers, while others indicated that staff had moved roles in search of higher salaries and greater job security.
Recruitment companies in the Midlands reported that redundancies had led to a rise in candidate availability for temporary positions in November. The latest increase was substantial and the steepest since October 2020.
The Midlands posted the second-fastest rise in temporary staff availability of the four English regions, behind only London.
Marked rise in permanent starting salaries
Salaries for permanent new joiners continued to rise sharply in November, with the rate of inflation quickening to a three-month high. That said, the latest rise was still softer than the series average. Recruiters indicated that competition for candidates and the placing of more senior roles had been behind the latest increase.
The rise in permanent salaries in the Midlands was faster than the UK average. London posted the fastest rise in permanent pay pressures, with the softest increase in the South of England.
Recruitment companies in the Midlands signalled a further rise in temporary pay rates midway through the final quarter of the year. The rate of inflation was solid and ticked up from that seen in October, but was still among the weakest in the current three-year period of inflation. The increase in temp wages was stronger than the UK average. The sharpest increase in pay for temps was registered in London, while the North of England was the only English region to signal a drop in wages.
Commenting on the latest survey results, Kate Holt, People Consulting Partner for KPMG in the Midlands said: “It really is great to see what a difference a few months makes. After a tough year for the job market in the Midlands we have now seen two months of consecutive growth in terms of permanent staff appointments – making our region the only one to see positive growth for the past two months when compared to the rest of the country.
“This upturn has also been coupled with a rise in salaries being offered to new permanent hires, and one that is faster than the UK average. The Midlands has also seen the number of temporary roles rise alongside temporary pay rates as we head into the final month of 2023.
“The figures are a great fillip as we run up to the end of a tough year and, hopefully, will act as a great springboard for more sustained and positive growth across the region in 2024.”
Neil Carberry, REC Chief Executive, said: “2023 has been a testing year in our labour market, with permanent hiring dropping and temporary hiring flat or growing only a little. That’s the story again in this month’s data, though the market is quieter overall as firms start to move activity into 2024 rather than pressing ahead now.
“Salaries for permanent new joiners continued to rise sharply in the Midlands in November and the increase in temp wages was stronger in the region than the UK average. The number of candidates available for permanent roles increased at a slightly stronger pace than the UK average and redundancies had led to a rise in candidate availability for temporary positions in November.
“Anecdote from REC members supports our client survey finding that employers are considering coming back to the market, but that in many cases the activity will be next year. So, while these figures represent a slight but further slowdown in current hiring conditions, recruiters are more positive about the new year.
“For policy makers, any return to growth will put strain on a labour market with embedded shortages – this week’s pro-election rather than pro-economy decision on immigration will exacerbate that. Any return to growth could drive domestically-generated inflation unless we adopt a proper plan for workforce capacity, embracing better welfare-to-work support, finally reforming the Apprenticeship Levy, funding Further Education properly and the kind of support for school leavers suggested by today’s Broken Ladders report from EDSK and REED on the school-to-work transition.”
