The latest KPMG and REC, UK Report on Jobs: North of England survey signalled a renewed drop in permanent staff appointments across the region during March. However, temp billings growth was sustained, with recruiters registering another solid monthly rise in billings for short-term workers.
Notably, the availability of candidates for both permanent and temporary roles improved for the first time in over two years amid a softening in the demand for staff. Nonetheless, pay pressures remained elevated, with the North of England recording the fastest monthly increases in rates of pay.
The KPMG and REC, UK Report on Jobs: North of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.
Warren Middleton, Office Senior Partner at KPMG in Manchester, said: “The latest findings reflect the ongoing turbulence of the region’s job market, with the continued uptick in temporary hires undermined by another drop in permanent appointments. This downturn is also being felt throughout much of the UK, as businesses grapple with talent shortages across a variety of sectors.
“Similarly, while candidate availability is showing signs of improvement, firms are needing to offer inflated pay packages in order to compete and attract the best talent, with the North recording the fastest rise in salaries last month. The tendency of jobseekers to stay put during times of economic uncertainty like the current cost-of-living crisis is putting pressure on companies needing to recruit.”
The seasonally adjusted Permanent Placements Index fell below the 50.0 no-change mark in March, signalling a decrease in permanent staff appointments across the North of England. This compared with February, which saw the first expansion since last September. According to surveyed recruiters, the number of placements fell due to a drop in client demand.
Three of the four monitored English regions registered a reduction in permanent staff appointments. The South of England, meanwhile, bucked the wider trend by recording a renewed upturn that was the first for seven months.
March survey data signalled a further rise in temp billings across the North of England. The rate of increase was strong overall and accelerated slightly since February. Increased activity levels at clients and greater candidate availability supported the upturn, according to respondents. Of the monitored English regions, only London recorded a faster expansion.
Job vacancies across the North of England continued to increase in March, in line with the trend seen for just over two years. Additionally, the North of England continued to record the fastest increase in job openings of the monitored English regions.
That said, increases in both permanent and temporary staff demand slowed and were at their weakest for 25 and 26 months respectively.
For the first time since January 2021, the latest survey data signalled an improvement in the number of candidates available for permanent job positions across the North of England. Moreover, the increase was strong and the quickest seen across the four monitored English regions by a considerable margin.
Surveyed recruiters noted a rise in employees looking to change roles, although redundancies were also reportedly a factor.
The seasonally adjusted Temporary Staff Availability Index rose above the neutral 50.0 mark in March, signalling a renewed increase in the supply of candidates for short-term roles across the North of England. The improvement in availability was strong overall and, as was the case with permanent staff supply, sharper than the other three monitored English regions.
Reduced activity levels across some sectors led to an uplift in temp availability, according to some respondents.
The seasonally adjusted Permanent Salaries Index registered further above the 50.0 no-change mark in March, signalling a faster rise in pay offers to new permanent joiners across the North of England. The rate of inflation was steep and the fastest in six months.
The accelerated rise contrasted with the other three monitored regions, where starting salary inflation eased. The North of England saw the fastest rise at the regional level by a notable margin.
Surveyed recruiters across the North of England recorded an uplift in temporary staff wages during March. Moreover, the rise quickened and was the strongest since November last year. According to anecdotal evidence, efforts to remain competitive underpinned increases in temporary wages.
Of the four monitored English regions, the North of England recorded the strongest increase in short-term pay.
Neil Carberry, Chief Executive of the REC, said: “Over the past few weeks, we have seen a bit more confidence among employers, and this is reflected in this latest data. Only London had a stronger rise in temp billings than the North of England, which recruiters report is down to increased activity levels at their clients and greater candidate availability.
“The fast rate of pay growth for permanent and temporary workers in the North is likely reflective of the impact of inflation on wage offers, as well as low labour supply. That means increasing pay is likely to persist, despite more people beginning to look for work.
“But this cautious optimism belies the scale of the challenge we face in tackling shortages and addressing economic inactivity. The recent Budget did call out the need to address labour market shortages, but the steps taken fell short of the more comprehensive workforce strategy that is needed if we are to avoid losing two Elizabeth Lines of growth every year from 2024. We need to put the people stuff first. Government can do more – but businesses too need to step up, as our Overcoming Shortages report showed.”
