Key points from March survey:
– Moderate fall in permanent staff placements
– Permanent vacancy growth at 30-month low
– Starting salaries rise at weakest rate since last July
Commenting on the latest survey results, Bina Mehta, Partner at KPMG UK said:
“The UKs engine room is now running on standby as the jobs market grinds to a halt in London and many businesses hit the pause button on new hires.
“The uncertainty caused by Brexit is having an impact on employer confidence in London where the fall in permanent staff placements was the fastest in two-and-a-half years. Applicant availability has also fallen sharply, with the majority of job hunters concluding now isn’t the right time to abandon the haven of an existing job.
“Sharp falls in recruitment activity combined with pay growth cooling off will concern UK economists and investors and put a drag on the economy.”
Neil Carberry, Chief Executive at the REC, said:
“We have a fantastic labour market that has delivered high employment and flexibility for workers because it helps companies meet their needs easily. It’s a British success story. But Brexit uncertainty has put the brakes on.
“With business investment rates poor, and little certainty about the path ahead, today’s data shows that the time for political game-playing is over – this situation is beginning to affect people’s daily lives as permanent staff appointments fell, and the growth of temporary jobs and starting salaries weakened.”
Permanent appointments fall in March
Permanent staff placements in London declined in March for the second time in the past three months. Although moderate, the pace of contraction was the fastest in two-and-a-half years. Survey evidence suggested that the
downturn reflected a combination of market uncertainty, subdued vacancy growth and candidate shortages.
Contract billings growth softens
March data pointed to back-to-back increases in contract billings across the capital, after growth came to a halt in January. However, the pace of expansion eased from mid-quarter and was only modest. Recruitment consultants that indicated greater contract billings mentioned growth of vacancies. At the same time, a few panellists reported hiring freezes among some clients.
Demand for permanent workers in London continued to increase in March, but growth softened to the slowest in the current two-and-a-half-year sequence of expansion. Notably, the rise was the weakest of the four monitored English regions. Similarly, growth of contract vacancies in the capital moderated to a 32-month low and was the slowest regionally.
Sharp drop in candidate numbers for permanent positions
As has been the case on a monthly basis for almost six years, there was a reduction in permanent staff supply in the capital. Although softer than in February, the pace of contraction was still sharp. According to survey participants, workers had adopted a conservative approach to job change due to a concerning political landscape.
Contract supply falls further at end of first quarter
Contract staff supply in London decreased for the sixty-eighth successive month in March. Despite easing to the weakest in three months, the rate of reduction was marked. In particular, recruitment consultancies signalled shortages of candidates to fill Human Resources, Blue Collar, Banking and Teaching positions.
Starting salary inflation at eight-month low
Permanent salaries awarded to newly-placed staff in London continued to increase at the end of the first quarter. According to monitored companies, a number of clients boosted pay packages to render roles more attractive and hence reach high-calibre candidates. That said, the overall rate of starting salary inflation was the weakest recorded since last July.
Contract pay stabilises in March
Contract pay was broadly stable during March, following growth in each of the previous 29 months. Adjusted for the influence of seasonal factors, the Temporary Wages Index recorded only fractionally below the 50.0 no-change mark. By comparison, pay awarded to contract workers increased in each of the other three English regions.
Official Data: UK Average Weekly Earnings
Data from the Office for National Statistics signalled that average weekly earnings across the UK rose by 5.4% year-on-year to £637 in the final quarter of 2018. London saw the strongest annual rise, with pay up 13.1% to £846. Meanwhile, the weakest increase was in the South East, with average weekly earnings rising by just 0.5% on the previous year to £685.
After stabilising in February, permanent staff placements fell for the second time in three months across the UK during March. Though only moderate overall, the latest fall was the fastest since July 2016. The downturn was driven by contractions in three of the four monitored English regions. The North of England was the only area to record a rise in permanent staff appointments. At the same time, contract billings continued to rise, which
extended the current run of expansion to nearly six years. However, the rate of growth eased from that seen in February, with softer increases in the Midlands and London, alongside a contraction in the South of England. Meanwhile, recruiters in the North of England reported the fastest expansion for five months.
Permanent staff availability fell further across the UK during March. The pace of decline accelerated from February, with quicker contractions in both the South and North of England. Meanwhile, the rate of deterioration softened in London and was broadly unchanged in the Midlands. In contrast, contract labour supply fell at the slowest pace since January 2017 at the national level. This was driven by softer deteriorations in three of the four monitored English regions. Notably, the Midlands recorded its weakest reduction for five-and-a-half years. The North of England was the only area to report a faster decline than in February.
As has been the case in each month since May 2012, permanent starting salaries across the UK rose during March. Though sharp overall, the rate of growth eased to its softest for almost two years. All four monitored English regions recorded a softer rise in permanent starting pay. Similar to the trend for permanent salaries, remuneration for contract workers in the UK increased at a slower rate in March. Although the latest rise was still sharp, it was softer than the average for 2018. The national trend was largely driven by a weaker rate of inflation in the North of England and a broad stagnation of contract pay in London.
About Langley James
Langley James was founded in 1999 by James Toovey, a highly respected recruitment industry professional. James wanted to provide something unique: a bespoke recruitment service which was founded on service excellence. With offices in London and Chester, we are now providing our recruitment services throughout the world and over the last 19 years have worked with some of the most respected companies.
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– and Delivering a Qualified Shortlist of Candidates 3 days
– and First Confirmed Interview 5 days
– and Confirmed Placement 8 days
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