North witnesses solid rise in permanent staff appointments in October

Euan West, KPMG

The latest KPMG and REC, UK Report on Jobs: North of England has highlighted an upturn in permanent staff placements in the region, at the start of the fourth quarter.

The report was compiled by IHS Markit, from responses to questionnaires sent to around 100 recruitment and employment consultancies in the North of England.

It reveals a solid increase in permanent appointments, as well as a modest rise in temporary billings. Demand for both permanent and temporary workers continued to increase, but the supply of labour fell further, adding to upward pressure on wages.

Recruiters mentioned increased demand from their clients when explaining the latest rise. And they reported an increase in temporary billings for the third month in a row during October.

Demand for permanent workers in the North of England continued to increase in October. Although the latest rise was the fastest recorded across all monitored English regions, it was the slowest upturn seen in the North since August 2012 and modest overall.

Meanwhile, temporary vacancies in the North continued to grow. The latest rise was slightly slower than that recorded in September, but was quicker than the UK-wide average.

Permanent staff availability in the North of England continued to fall at the start of the fourth quarter, extending the current run of contraction that began in February 2013.

Many recruiters suggested candidates were unwilling to move roles amid continued uncertainty surrounding Brexit.

For the third time in as many months, temporary labour supply across the North of England fell in October. The rate of decline was the fastest since May.

Starting salaries awarded to permanent workers in the North of England kept rising at the start of the fourth quarter. Recruiters noted that higher pay was required to attract candidates with relevant skills.

Wages awarded to temporary staff rose at a slower pace in the North of England during October. The latest increase was the softest since March 2018 and lagged behind the UK-wide average.

Where recruiters recorded wage inflation, they often linked this to candidate shortages.

Euan West, office senior partner at KPMG in Leeds, said: “As the UK heads to the polls next month, adding to existing uncertainty, it’s encouraging to see northern businesses bucking the national trend and pressing on with their expansion plans – another feather in the cap for the North’s robust economy.

“For the region to continue to thrive, it’s critical that businesses have the confidence to continue recruiting for permanent roles while allowing for more flexible billings to ensure the right mix of talent and resource.

“This latest acceleration is a welcome change from the high levels of caution we’ve seen throughout the year.”

Recruitment & Employment Confederation chief executive Neil Carberry said: “These figures underline why this needs to be a jobs election.

“The labour market is strong, with permanent placements rising in the North, but vacancies growth has fallen to its lowest level since August 2012. One bright spark is the temporary labour market, which continues to provide flexible work to people and businesses that need it during troubled times.

“Ending political uncertainty and getting companies hiring again is vital – but we must also look to the long term future of work.

“Jobs must be front and centre during this election campaign, and we will be launching our REC manifesto for work next week.”