Permanent placements fall, but temp billings return to growth

Permanent and temp staff supply rise substantially

Growth of starting salaries and temp wages accelerate further

Chris Stott, Office Senior Partner for Manchester at KPMG UK said: “The Report on Jobs data for the North from May highlights the complexities in the current labour market, with placements for permanent staff falling again and continued upward pressure on pay amongst competition for candidates with the right skills. “With expected rate cuts, inflation easing and increased consumer confidence over the summer, we’d hope that the prospect of a better economic outlook for the rest of the year will boost business confidence. Alongside this, business leaders in the North will be watching the General Election closely as they consider their plans for growth.” REC Chief Executive Neil Carberry, said: “The jobs market looks like it’s on its way back across the UK, with clear improvements over last month on most key measures in the North. “Recruiters are noticing that candidates are more confident to put themselves forward now in the North and an increased willingness among candidates to accept temp roles 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 strong, 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.

Sustained drop in number of permanent staff appointments

Recruiters across the North of England signalled a further reduction in the number of staff placed into permanent roles, thereby
extending the current sequence of contraction to just shy of a year. The rate of decline was solid and largely consistent with April. Panellists reportedly linked the fall to a drop in demand for permanent staff. The reduction in the North of England was the second-most marked of the monitored English regions, only slower than the South of England.

Temp billings return to growth after three successive monthly falls

The seasonally adjusted Temporary Billings Index posted above the neutral 50.0 mark for the first time in four months in May, to signal
a rise in the number of staff placed into temporary roles across the North of England. Recruiters noted that demand for temporary
staff had increased following new contract wins and the start of new projects. Locally, the growth rate was moderate, but nevertheless the most pronounced of the four monitored English regions.

Staff availability

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

Fastest rise in permanent staff supply since last August

May survey data highlighted a fifth consecutive monthly increase in the availability of permanent staff across the North of England. Supply grew at a substantial pace that was the quickest for nine months and notably elevated compared to the long-run series trend. Recruiters often noted that candidate confidence had increased. The South of England was the only monitored region to record a quicker rise than the North.

Growth of temporary staff supply hits ten-month high

In line with the picture for permanent candidates, the availability of temp staff increased further and at an accelerated rate midway through the second quarter. As well as steep, temp staff supply growth was at its most pronounced for ten months.
Panellists suggested that there was increased willingness among candidates to accept temp roles due to redundancies and the current economic climate. The rise in temporary staff availability was however slower than that see at the UK level.

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 accelerates in May

As has been the case in each month since early 2021, recruiters across the North of England continued to report starting salary
growth in May. Some panel members noted higher starting salaries were offered in order to attract skilled candidates, while others
linked the uplift to the seniority of the roles recruited. As well as robust, the pace of increase in the North of England posted a nine-month high
and was the sharpest of the four monitored English regions.

Hourly wage inflation for temp staff posts one-year high

Hourly pay awarded to new temporary joiners rose again midway through the second quarter, thereby stretching the current sequence of growth to six months. The rate of inflation in temp wages was the strongest for a year and substantial overall. Hourly pay rates were reportedly lifted in line with permanent salary growth to ensure pay parity. Regionally, the North of England registered the sharpest rise in hourly pay for temporary
staff in May.