Permanent staff placements decline at quickest rate in a decade

The Midlands registered a substantial drop in the number of people placed in permanent jobs during March, as uncertainty surrounding the outlook for the country weighed on hiring availability.

The latest KPMG and REC, UK Report on Jobs is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands
Latest data pointed to the fastest decline in permanent placements in exactly ten years. Temp billings continued to rise, albeit at a notably weak rate. Staff availability continued to drop, putting pressure on starting salaries.

Recruiters in the Midlands saw a substantial fall in permanent placements during March, as 2019 data continued to show declining recruitment activity.

The latest reading marked the quickest drop in placements for a decade. Respondents frequently linked this to companies holding off on new hires due to current political uncertainty. For the UK as a whole, permanent staff placements fell for the second time in three months. Though only moderate overall, the latest fall was the fastest since July 2016. The North of England was the only area to record a rise in permanent staff appointments.

Temp billings rose modestly in the Midlands at the end of the first quarter. The pace of increase was the softest recorded in nearly three years and was weaker than the UK average. Panellists in the region commented that while some employers increased hires as markets improved, others limited them because of Brexit uncertainty and reduced manufacturing demand. A softer increase was also seen in London, while a contraction was recorded in the South of England. Meanwhile, recruiters in the North of England reported the fastest expansion for five months.

Growth in permanent vacancies in the Midlands was unchanged in March from February’s six-year low.

Meanwhile, temporary vacancies recorded the slowest increase since February 2013. Again, the region saw the second-weakest rise of all monitored areas (behind London).

The availability of permanent staff in the Midlands decreased further in March. However, the rate of decline was fractionally weaker than in February, edging the respective index up to an 11-month high. The fall was the slowest seen across all four monitored English regions. Panellists found that employees were hesitant to switch jobs in the midst of Brexit uncertainty. Permanent staff availability fell further across the UK. 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.

Recruiters saw a solid drop in temporary staff supply in March but this represented the softest decline since September 2013, with all other UK monitored areas seeing sharper falls than the Midlands.

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.

“We can make this slowdown a blip. Ending the uncertainty around Brexit will help firms invest and create jobs. Firms across the country need a stable plan that tells them where they will be next year – not next week.”