Permanent placements rise at softer rate across the North West

The latest KPMG and REC, UK Report on Jobs: North of England survey pointed to a softer rise in permanent staff appointments across the North West in October.

Meanwhile, temporary billings increased at the quickest rate for almost three years as demand for temporary staff strengthened.

The supply of workers, meanwhile, continued to expand markedly amid widespread reports of redundancies related to the coronavirus pandemic, leading to a reduction in starting pay.

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 a second successive monthly increase in permanent staff appointments during October.

That said, the rate of growth eased from September and was historically subdued.

Anecdotal evidence indicated that the further rise in permanent placements was driven by a recovery in demand for workers following the COVID-19 lockdown.

At the national level, there was a renewed fall in permanent staff appointments, but the rate of decline was only mild, and much slower than those recorded in the Spring.

Regional data highlighted notable divergences, with the Midlands also registering a further rise, while the South of England and London posted reductions.

Temporary billings across the North West continued to rise at the start of the fourth quarter, extending the current sequence of growth to four months.

Moreover, the latest increase was the fastest since November 2017, with recruiters continuing to report elevated demand for short-term workers.

Across the UK as a whole, temp billings rose at the quickest pace for almost two years. Across the four monitored English regions, the Midlands saw the sharpest increase. London was the only monitored region to record a fall.

Demand for permanent staff across the region continued to decline at the start of the fourth quarter.

However, the rate of deterioration eased to the softest in the current eight-month sequence and was only marginal overall.

The latest reduction was also softer than the UK average.

Meanwhile, temporary staff vacancies in the North increased for the second month running. Despite easing from September, the rate of growth remained faster than the UK-wide trend.

October data pointed to another sharp rise in permanent staff availability across the North.

Panellists continued to comment on an increase in candidate numbers amid redundancies related to the COVID-19 pandemic.

The expansion in permanent labour supply was, however, the softest since May. At the regional level, the uptick was broad-based and led by the South of England, while the Midlands registered the softest increase.

Amid widespread reports of job losses related to the pandemic, temporary labour supply in the North of England continued to grow during October.

Although softer than the average recorded since the introduction of restrictions in March, the rate of increase accelerated from September and was marked overall. London registered the most marked uptick in temp availability and the Midlands the slowest.

Starting salaries awarded to permanent workers in the North of England fell further in the latest survey period, but the rate of reduction was the softest in the current seven-month sequence of decline and modest overall.

When explaining decreases in pay, recruiters often cited an oversupply of candidates.

Salaries awarded to permanent new joiners across the UK as a whole also declined for the seventh month running, with the rate of deflation quickening slightly on the month and remaining sharp. Across the four monitored English regions, London registered the fastest reduction in permanent salaries.

Following the first increase for seven months during September, there was a renewed decline in remuneration awarded to temporary staff during October.

The reduction was, however, the second-softest across the four monitored English regions, behind only the South of England. Across the UK as a whole, the rate of decline accelerated from September and was solid overall.

Warren Middleton, office senior partner for KPMG in Manchester, said: “With the growth in permanent staff recruitment starting to soften, and a big increase in people available for work, the impending lockdown puts our regional jobs market in a precarious position.

“While the furlough scheme extension may give a brief respite, it will fuel economic uncertainty and further dampen prospects for jobseekers, hitting hiring activity hard.

“The Government needs to ensure it offers enough financial support to the region’s businesses and opportunities for jobseekers to upskill as we continue to navigate through this crisis.”