Job placements fall and candidate numbers increase as employment woes continue

The latest KPMG and REC, UK Report on Jobs survey pointed to another sharp reduction in recruitment activity in the North West during May.

Both permanent placements and temporary billings fell sharply, albeit not quite as severely as in April.

This was predominantly driven by a steep contraction in demand for workers amid the coronavirus pandemic.

Meanwhile, redundancies related to the coronavirus led to another substantial increase in candidate availability.

The plunge in demand for workers combined with rising staff supply led to sharp falls in starting salaries and temp wages.

The report, which is compiled by IHS Markit, is based on responses to questionnaires sent to around 100 recruitment and employment consultancies in the North of England.

Recruiters in the North West reported another sharp reduction in permanent staff appointments during May.

Although the rate of contraction eased from April’s survey record, it was, nonetheless, the second-fastest since data collection began in October 1997.

Anecdotal evidence indicated that coronavirus-related business closures continued to suppress demand for workers. Across the UK as a whole, May data highlighted a further rapid reduction in the permanent staff appointments.

Temporary billings in the North West fell for the third month in a row during May.

Though substantial, the pace of decline decelerated from April. When explaining the latest decrease in temp billings, recruiters cited company closures and weak overall demand for staff.

At the national level, temporary billings fell at the second-fastest rate on record. Each of the English regions registered a drop in temporary billings, the sharpest of which was seen in the South of England.

Demand for both permanent and temporary staff in the North West continued to deteriorate in May, extending the current period of decline to three months.

Permanent vacancies contracted at the second-quickest pace on record, after April, with the rate of decline slightly faster than the UK average.

The latest reduction in demand for temporary staff was also softer than that seen in April, but remained among the quickest since data collection began.

Permanent labour supply in the North West grew sharply for the second month in succession during May.

Moreover, the rate of expansion accelerated from April’s recent high to reach the fastest for almost 11 years.

Recruiters suggested that the increase in availability was driven by coronavirus-related redundancies and widespread use of the UK’s furlough scheme.

Permanent candidate numbers rose at an identically sharp pace across the UK as a whole. Steep and accelerated increases in permanent candidate supply were also seen across the other English regions monitored by the survey.

Recruiters in the North West recorded another marked increase in temporary staff availability during May.

In fact, the rate of growth accelerated from the previous period to reach the quickest since June 2009.

Anecdotal evidence indicated that there were more people seeking temporary roles after being made redundant due to COVID-19.

The availability of temporary candidates also expanded markedly at the national level, with the pace of increase slightly exceeding that seen in the North West. On a regional basis, the Midlands and the South of England noted the joint-quickest upturn in temporary labour supply.

Salaries awarded to permanent starters in the North West continued to fall sharply midway through the second quarter.

The result marked only the second monthly decline in more than eight years, following a decrease in April.

That said, the rate of reduction remained softer than the UK average. Across the UK as a whole, salaries awarded to permanent new joiners fell at the quickest pace in more than 11 years. At the regional level, the reduction in pay was most marked in London.

Faltering demand for workers and rising economic uncertainty drove temp wages across the North West lower in May.

The result extended the current sequence of decline to three months.

Moreover, the rate of reduction accelerated to the sharpest since September 2009. At the national level, average hourly pay rates for short-term staff declined at the fastest rate since May 2009.

A fall in temp wages was recorded in each of the four monitored English regions during May, with London noting the quickest rate of decline. The softest reduction was seen in the Midlands.

Warren Middleton, office senior partner for KPMG in Manchester, said: “As the Government begins to slowly ease its lockdown measures, businesses across the North West are working hard to get their operations back up to speed.

“Coronavirus-related business closures have continued to suppress the job market across the North West with the repercussions of the last few months expected to be felt for some time, as businesses focus on maximising their current resources rather than onboarding new talent.

“Indeed, all eyes will be on the recovery phase, and whether mooted government measures around skills, retraining and adaptability materialise.”

Recruitment & Employment Confederation chief executive, Neil Carberry, said: “Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak.

“But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued.

“I’m also hearing from business leaders all over the country that things are starting to look up. There is a long way to go, but it’s time to talk about how we recover from this crisis.

“Collaboration between government, businesses and recruiters will be vital as we try to get the economy up and running again. The UK’s staffing and recruitment companies are experts at helping people find work, and we are ready to support jobseekers in the months ahead.”