The latest KPMG and REC, UK Report on Jobs: Midlands highlighted a further increase in the number of permanent staff appointments during January. Though softening to the weakest for four months, the rate of increase remained marked as companies continued to hire amid a sustained increase in demand for staff.
Temp billings also continued to rise, and at a faster rate as the rate of increase rose to the quickest since last August. Demand and supply mismatches continued during January however, as the strongest fall in permanent staff availability for three months coincided with a further robust upturn in vacancies.
The report is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.
Permanent staff appointments rise at softer pace
The number of permanent placements across the Midlands rose for the eleventh consecutive month in January. The rate of increase softened from the previous survey period and was the slowest since September. That said, the rise remained marked overall. According to anecdotal evidence, companies kept up hiring amid stronger demand for staff.
Across the four monitored English regions, the Midlands saw the second-slowest upturn in January, ahead of the North of England.
As has been the case in each of the last 19 months, temp billings in the Midlands rose during January. The rate of increase was rapid, and the quickest recorded since August. Firms generally commented that additional candidates were taken on in response to rising demand. The rise in temp billings was slightly softer than the national average however, and the second-slowest of the monitored regions.
Recruiters across the Midlands signalled a sustained increase in the number of permanent vacancies in January. The rate of expansion eased for the fifth month running and was the softest since last February. Moreover, the rise in vacancies in the Midlands was the softest of the four monitored regions.
At the same time, temporary vacancies rose at a quicker pace for the first time in six months in January. The increase was robust, yet was the weakest among the four monitored English regions.
Downturn in permanent staff availability accelerates
A tenth consecutive monthly decrease in permanent staff supply was recorded in January. Moreover, the pace of the fall quickened and pushed the respective seasonally adjusted index to the lowest level since October. Recruiters commonly attributed the downturn to a shortage of suitably qualified candidates amid stronger demand. All four monitored regions saw staff availability fall, though the Midlands reported the softest reduction.
The availability of temporary staff across the Midlands fell for the twelfth time in 13 months during January. The rate of decline was marked overall, though eased from the previous survey period to the softest for eight months.
All four monitored English regions recorded falls in temp staff supply in the latest survey period, with recruiters in the Midlands reporting the second-softest decline, behind the South of England.
Further rapid rise in permanent starting salaries
Salaries awarded to permanent new joiners across the Midlands increased at a robust pace in January. The rate of increase gathered pace from the previous survey period, and was robust overall. According to respondents, stronger demand for skilled workers amid shortages was a key factor in higher starting salaries. Recruiters in the Midlands recorded the slowest rise in average starting salaries of the four monitored regions.
Latest data highlighted a fourteenth consecutive increase in average pay rates for short-term staff in the Midlands. The rate of wage inflation softened to a seven-month low, though remained marked overall.
All four English regions reported strong rises in temp rates, as only South of England-based recruiters reported a stronger rise in wage inflation than those in the Midlands.
Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG, said: “The Midlands jobs market powered into 2022 with relentless growth in demand and a rapidly shrinking pool of candidates. This ongoing tension underlines how critical skills and education are to the future economic success of the region.
“Employers are desperate for talent to fill vacancies and to have a more active role in the influencing and development of skills planning in their local labour market. We know employers are eagerly awaiting more detail on how the devolution across the Midlands will help tackle the economy’s skills challenge and enable businesses and the communities they work with to achieve their full potential.”
Neil Carberry, Chief Executive at the REC, said: “The jobs market is still growing strongly at the start of 2022. Recruiters are working hard to place people into work as demand from employers continues to rise. With competition for staff still hot, companies are having to raise pay rates for new starters to attract the best people. And the cost of living crisis means there is also more pressure from jobseekers who want a pay rise.
“But pay is not the only important factor – companies must think about all aspects of their offer to candidates to ensure they get the staff they need. This will be important as firms’ spending is under pressure from inflation as well.
“Government’s role is to manage inflation, but also to ensure that they do not discourage investment – that is what will drive the economy to grow through this year. Now is the wrong time to be raising National Insurance, the biggest business tax. But politicians should also be thinking about longer-term workforce planning, making sure we have the skills the country needs for the future. This will take a collaborative effort between the public and private sectors, and the recruitment industry stands ready to help.”
