Jobs market remains buoyant but war for talent continues

There was a strong rise in permanent job placements in November but the supply of permanent workers declined due to uncertainty surrounding Brexit and a shortage of skilled workers.

The KPMG and REC, UK Report on Jobs: Midlands said anecdotal evidence suggested that demand for permanent workers had strengthened following new contract wins.

The pace of growth was just below the UK average, but overtook the North of England to be the third strongest English region.

At the UK level, permanent staff placements rose markedly albeit at the weakest since July and the second-slowest recorded in 2018 so far. The softer performance was driven by slower increases in the North and South of England, with the former recording only a marginal upturn that was the joint-softest since April 2013.

Temp billings across the Midlands expanded at the fastest rate of the four monitored English regions. The marked increase was well above the UK average and was commonly linked to robust demand for temporary workers.

The rate of increase in permanent vacancies across the Midlands remained sharp in November but the upturn in demand for permanent workers was the weakest since August 2016.

The availability of permanent staff fell further in November, according to recruitment agencies across the Midlands. The robust decline was the fastest of the four monitored English regions. Panellists attributed the reduction in permanent worker supply to uncertainty surrounding Brexit and a shortage of skilled workers.

The supply of temporary labour declined further in November, and the contraction was the quickest of the four monitored English regions. Reduced availability was commonly linked to skill shortages and an increase in contractors leaving the UK ahead of Brexit.

Permanent starting salaries increased at a sharp pace in November, but was below the UK average. Where a rise was reported, panellists linked this to higher skilled placements and efforts to attract candidates. The rate of pay inflation was the weakest since July, however, and only fractionally faster than the North of England which registered the slowest rise.

Kate Holt, people consulting partner at KPMG in the Midlands, said:“The job market in the Midlands remains buoyant for workers, with a rise in the number of vacancies. However for employers, the cliché of the war for talent is ever present.

“There is a clear scarcity of skills and it continues to put pressure on starting salaries, which are increasing. So it’s really important for the region’s employers to ensure that they have a strong proposition for future employees.”

Neil Carberry, chief executive at the REC, added: “Today’s report backs up what recruiters across the country are saying to us. High employment rates and a lack of willingness to change employer in this uncertain climate means fewer people are looking for jobs – despite rising pay and jobs being available.
“After a long run of strong performance, it seems that employers are getting more nervous as well. Although permanent and temporary placements continued to increase, the pace of growth has slowed since earlier in the autumn.

“Recruiters across the country are working hard to fill gaps in our labour market but in the run-up to Christmas, sectors like hospitality and warehousing are facing particular challenges as they ramp up to the festive season. More clarity on the future path of Brexit and immigration will underpin business and consumer confidence, ensuring the UK’s jobs performance remains strong.”