Key findings from the October survey:
– Permanent appointments and contract billings both rise at faster rates
– Stronger decline in staff availability
– Shortages push starting salary inflation to four-month high
Chris Hearld, Northern Regional Chairman at KPMG UK commented:
“Businesses in the North have been relentless in hiring new staff over the past few years and continue to do so, which points to a resilient and confident economy. But, as more job opportunities are created, the region is
being hampered by chronic skills shortages – something that is proving to be a challenge for many of our clients. Competition for the best talent will be fierce and management teams will need to consider attracting
recruits from beyond their local markets, which will also put upward pressure on wages.”
Permanent staff appointments rise at a faster pace
October survey data signalled a renewed acceleration in the hiring of permanent staff in the North of England. Panellists commonly attributed growth to strong sales performance at clients. Permanent staff appointments have now increased for 66 consecutive months.
Contract billings growth hits three-month high
After easing to a five-month low in September, contract billings growth rebounded to the fastest since July. Recruiters in the North of England reported that greater demand for staff, particularly for industrial, construction and blue collar workers, boosted contract billings during October.
The number of permanent vacancies in the North of England continued to rise during October. The sharp increase was faster than that seen in September and slightly quicker than the average across the UK. Similarly, the number of available jobs for contract workers rose further at the start of the fourth quarter. The pace of expansion was the quickest in 14 months and outpaced the UK average.
Permanent staff availability continues to decline
The availability of permanent staff continued to fall at the beginning of the final quarter, as it has done since February 2013. Recruiters in the North of England reported another sharp decline, one that was faster than that seen in September. However, the rate of contraction remained softer than the average for 2018 so far. Anecdotal evidence pointed to a number of skill shortages including those of accountants, drivers, engineers and lawyers.
Sharper fall in contract worker availability
There was another sharp decline in contract staff availability during October. After softening in each of the past three months, the rate of contraction accelerated in the latest survey period. Panellists often mentioned widespread shortages of skilled workers in areas such as finance, payroll, engineers, IT and sales.
Permanent salaries index – Starting salary inflation reaches four-month high
October data pointed to a further sharp increase in remuneration offered to newly-placed permanent workers. Recovering from September’s recent low, the rate of inflation accelerated to a four-month high in October. Panellists regularly attributed higher starting salaries to skill shortages and the need to attract staff.
Contract pay rates – Contract wages rise further during October
Contract hourly pay rates increased again in October, but the rate of wage inflation slowed for the third month in a row. Notably, short-term pay expanded at the weakest rate since March. However, some recruiters in the North of England explained that the continued increase was as a result of a greater need to attract workers, particularly in lower pay brackets.
Official Data – UK Average Weekly Earnings
Data from the Office for National Statistics signalled that average weekly earnings across the UK increased 2.2% on an annual basis in the second quarter of 2018. The North East posted the strongest annual rise, up 9.1% to £549. Meanwhile, the quickest fall was seen in the South West, with average weekly earnings falling 4.6% compared to a year ago to £574.
Permanent staff appointments continued to rise across the UK during October, with the rate of growth faster than that seen in September. The sharper increase was driven by quicker rises in three of the monitored English regions. London was the only locality to post a softer upturn. Similarly, there was an overall increase in contract staff billings across the UK during October. The marked expansion was the second-fastest seen so far this year as all four regions posted faster rates of growth compared to September.
October data signalled the sharpest fall in permanent candidate availability in the UK since January, extending the current run of decline to 66 months. The steeper contraction in available permanent workers was driven by the South of England, which registered the strongest downturn of all English regions.
There was also a fall in the availability of contract workers across the UK. The overall pace of decline was quicker than in September. At the regional level, faster falls in the Midlands, the North of England and London contrasted with a softer contraction in the South of England.
UK permanent starting salaries rose markedly at the start of the fourth quarter. The pace of inflation was slightly slower than that seen during September, but elevated relative to the historical average. Salary growth was fastest in the South of England and slowest in London.
Pay given to contract workers in the UK also rose in October. Though sharp, the increase in contract pay rates was weaker than that seen in September and the slowest for seven months. London posted the quickest rise, followed by the Midlands, the South of England and the North of England respectively.
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 18 years have worked with some of the most respected companies.
The average time from taking a role…
– and Delivering a Qualified Shortlist of Candidates 3 days
– and First Confirmed Interview 5 days
– and Confirmed Placement 8 days
To find out why so many companies turn to Langley James for support in fulfilling their IT recruitment needs, call and speak to one of our specialist consultants today on 0207 788 6600.
In conjunction with: IHS Markit and sponsored by the Recruitment and Employment Confederation.