Permanent placements join temp billings in growth territory

Starting salary growth loses momentum but remains strong

Hourly pay rates rise rapidly, and at the sharpest rate in 2024 so far

Commenting on the latest survey results, Kate Holt, People Consulting Partner for KPMG in the Midlands said: “This month’s data suggests local employers are slowly taking the brakes off of recruitment freezes and are looking to get their businesses moving again. The Midlands was the only region in the UK that recorded an increase in the number of people getting into permanent work which suggests green shoots of jobs recovery are on the horizon. “With starting salaries rising, local businesses are prepared to pay a premium to get the right skills into their businesses in order to kickstart growth. “The business environment remains challenging, but as the economy slowly improves, and with the
General Election now called which will provide the stability businesses need to start investing again, business confidence is turning a corner. ”Neil Carberry, REC Chief Executive, said: “The jobs market looks like it’s on its way back in the UK, with clear improvements over last month on most key measures, especially in the Midlands. Permanent hiring in the Midlands increased for the first time in six months, and the temp billings have improved in the region. “There is potential energy stored in the economy, as employers are feeling more confident. Political certainty and falling interest rates should add to lower inflation and help this turn into movement over the course of the rest of the year. REC members report that clients are ready to hire, but hesitant. These numbers suggest that caution may be starting to abate. “Pay growth remains steady, reflecting both settlements made by employers for their staff, but also the substantial National Minimum Wage rise in April. “No attempt to drive growth will succeed without the next government addressing people issues within its first 100 days. This must include reform of the Apprenticeship Levy to cover high-quality, modular training, and a long-term cross-departmental strategy to tackle labour and skills shortages, owned by the Cabinet Office but delivered locally. As the specialists in jobs, recruiters are ready to help, whoever wins on July 4.”

Staff appointments

Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.

First rise in permanent appointments for six months

The number of staff placed into permanent roles rose across the Midlands, ending a five-month run of decline. Recruiters linked the renewed uplift to increased demand for permanent staff. Others also noted new client wins. That said, the rate of expansion was only marginal and subdued when compared to the long-run series trend. The Midlands was the only monitored English region to record an uptick in permanent placements.

Third monthly rise in temp billings seen in 2024 so far

May data saw the number of billings received for the employment of temporary staff increase for the second month in a row across the Midlands. Survey respondents cited an improvement in demand for temp workers, while others mentioned a rise in candidate availability. While only modest, the uplift was the sharpest for three months. Regionally, only the North of England registered a faster increase in temp billings than the Midlands.

Staff availability

Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month.

Permanent staff availability rises at quickest rate seen this year so far

The seasonally adjusted Permanent Staff Availability Index signalled a fourteenth consecutive monthly rise in permanent candidate numbers in May. There were reports that the uplift in permanent staff supply was linked to a rise in redundancies. The rate of increase was again substantial and the strongest seen this year so far, but subdued when compared to the national average.

Solid rise in temporary staff supply in May

Temp staff availability across the Midlands picked up again in May, as has been the case for just over a year. Recruiters mentioned an
increased willingness among candidates to accept temporary contracts. Though easing from April, the rate of growth in temp staff
supply was solid. The Midlands recorded the slowest rise in temp staff availability of all four monitored England regions for the third month running.

Demand for skills

Pay pressures

The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.

Starting salary inflation loses momentum in May

Recruiters across the Midlands continued to record an increase in starting salaries in May, thereby stretching the current sequence
of uplifts which began in March 2021. Some panellists mentioned that a rise was due to an increase in the proportion of senior
roles hired. Though strong, the rate of salary inflation eased on the month and remained subdued when compared to the long-run
trend. The Midlands recorded the second-strongest salary growth of the four monitored English regions, behind only the North.

Strongest rise in hourly pay for five months

Average hourly pay for short-term staff continued along an upward trend midway through the second quarter. The rate of temp wage growth was substantial and the most pronounced in 2024 so far. According to anecdotal evidence, the uptick followed a rise in demand for temporary workers.
Only the North registered a sharper rise in temp wages than that seen locally.