The latest KPMG and REC, UK Report on Jobs: Midlands highlighted a record rise in both permanent starting salaries and hourly wages for temporary staff in November, amid a combination of sharp and sustained growth in demand for staff and a further marked deterioration in the supply of candidates.
A further steep expansion in permanent placements was also recorded, and one that was the sharpest since June’s series record. Meanwhile, growth in temporary billings eased to the joint-softest since May.
The report is compiled by IHS Markit 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 midway through the fourth quarter of the year. The increase was rapid overall and the sharpest seen since June’s survey record. Recruitment consultancies indicated that placements had risen following stronger demand from clients for permanent staff amid sustained shortages.
The increase in permanent placements in the Midlands was slightly quicker than that seen at the UK level.
November data pointed to a continued increase in temporary billings in the Midlands. That said, the rate of expansion slowed from October and was the joint-softest since May (equal with September). Some respondents suggested that while clients were more confident, there were fewer applications for temporary positions.
Growth in temp billings was also the slowest of the four monitored English regions.
Permanent vacancies increased at a marked pace in the Midlands during November, though the rate of increase eased for the third month running. As a result, permanent vacancies increased at the softest pace since March.
Demand for temporary staff also rose steeply in the latest survey period. Yet, the pace of expansion softened from October to the slowest for eight months.
Growth in demand for staff in the Midlands was weaker than the national average.
Softer decline in permanent candidate numbers
The Midlands saw a further reduction in the supply of permanent candidates during November, though the rate of decrease slowed to the softest since May. Anecdotal evidence suggested that people currently in work were reluctant to move at present given higher levels of uncertainty. At the national level, the reduction in the availability of permanent staff was than quicker that seen in the Midlands.
Recruitment consultancies indicated that temporary candidate numbers decreased at a rapid pace in November. The pace of reduction slowed for the third month in a row to reach the softest for six months. A number of respondents indicated that Brexit and tax legislation changes had contributed to a lack of available staff for temp roles. The fall in temp staff availability was the least marked of the four monitored English regions, however.
Permanent salaries rise at record rate for the second month in a row
Permanent salaries for new joiners in the Midlands increased at the fastest pace in the survey’s history in November, with the rate of inflation surpassing the previous record set in October. A combination of rising demand for staff and a lack of suitable candidates was behind the increase in permanent salaries.
The rise in permanent salaries in the Midlands was the sharpest of the four English regions covered.
As was the case with permanent starting salaries, pay rates for temporary staff rose sharply during November. The rate of inflation was the strongest since the survey began in October 1997. Recruitment consultancies indicated that candidate supply shortages had been the principal factor leading to higher pay rates. Moreover, the increase in the Midlands was the quickest of the four monitored English regions.
Commenting on the latest survey results, Kate Holt, People Consulting Partner at KPMG, said: “The rate of sustained salary growth across the region suggests that the war on talent shows no signs of abating as businesses continue to look for people with the right skills.
“The demand and supply imbalance, however, is not going to change overnight, and while January typically is a busier month for jobseekers, it won’t tackle the bigger issue, which is essentially skills. If we address this issue, then pressures will begin to ease, but effort is required of all to look at how to identify and maximise on transferable skills, as well as upskilling and reskilling.”
Neil Carberry, Chief Executive at the REC, said: “Today’s figures emphasise again how far we have come this year – it is certainly a great Christmas if you’re looking for a job. This is always the busiest part of the year for recruiters, but demand for new staff across the autumn has been exceptional.
“Because of this high demand, starting salaries and temp rates continue to rise, making it even more attractive to be looking for a new opportunity in 2022. Hiring companies will need to make sure they get their offer right – not just on pay – and take an inclusive approach if they are to avoid losing out.
“It’s too early to tell what the effect of the Omicron variant might be on the labour market – December may be slower than previous months as its effects feed through. Hospitality will be in the forefront of any changes as we approach the festive season, of course, and the impact of high inflation will also be felt as purses tighten in January.
“But the broader outlook is more positive for candidates, suggesting that the labour market will remain tight for some time to come. This will put a premium on skills development, and the flexibility to hire overseas when necessary. These two issues will be critical ones for the government to address next year – both levelling up and delivering a global Britain rely on them.”
