Permanent staff appointments for the North rise for first time in four months

Warren Middleton

Permanent staff appointments across the North increased during February, the latest KPMG and REC, UK Report on Jobs: North of England survey revealed.

This ends a four-month sequence of contraction.

The UK-wide trend saw permanent placements decline midway through the first quarter.

Temp billings also expanded across the North of England, albeit at a softer pace.

Meanwhile, accelerated increases were seen for both permanent and temporary job vacancies, while recruitment agencies also signalled softer deteriorations in the supply of both types of candidates.

Nevertheless, permanent salaries continued to rise, and at the fastest pace for four months. By comparison, temporary wage inflation eased to its weakest for almost two years.

Warren Middleton, office senior partner at KPMG in Manchester, said: “It’s encouraging to see employers across the North had better fortunes filling vacancies in February. Indeed, it was the only region to see permanent appointments return to growth last month, arresting a trend of decline seen since October of last year.

“This may partly be down to businesses increasing salary offers for permanent new joiners at a faster rate than on average across the UK in order to attract talent.”

He added: “Despite these positive signs on candidate availability, the findings also show that vacancies are still outpacing appointments, suggesting Northern firms are still having some difficulty in finding the right talent.”

The seasonally adjusted Permanent Placements Index posted above the 50.0 no-change mark in February, signalling the first monthly rise in permanent staff appointments across the North of England since September 2022. Moreover, this contrasted with the UK-wide trend, which showed a fifth consecutive decline.

The North of England was the only monitored part of England to see permanent placement growth in February. Strong demand for staff reportedly underpinned the latest expansion.

Recruitment agencies in the North of England recorded a third straight month-on-month increase in their billings received from the employment of temporary workers in February. According to surveyed consultancies, client demand for short-term staff rose.

Although the upturn was softer than in January, it was, nonetheless, solid and faster than those seen in the South of England and London. The Midlands was the only monitored English region to register a decline in billings.

February survey data highlighted further increases in staff demand across the North of England.

In fact, job openings for both temporary and permanent positions rose at their fastest rates for five months. Vacancy growth across the North of England continued to outpace that seen at the UK level by a considerable margin.

The latest survey data pointed to a further deterioration in the availability of permanent candidates across the North of England. The decline was the sharpest seen of the three monitored English regions that posted a fall, but slowed to the weakest for almost two years.

While some survey respondents remarked on difficulties in enticing candidates to change roles, there were others that noted an improvement in supply.

While the seasonally adjusted Temporary Staff Availability Index posted below the 50.0 no-change mark for a third month running, and therefore pointed to a decline in temporary candidate numbers across the North of England, it rose since January. Overall, the deterioration in supply was the weakest in the current sequence and mild.

A pick up in market conditions reportedly supported an increase in candidate numbers. That said, this was reportedly offset by a preference for permanent positions among candidates, as well as skill mismatches.

Notably, the North of England saw a softer fall in temp staff supply than those seen in the South of England and the Midlands. Short term candidate availability meanwhile rose again in London.

Salaries awarded to new permanent joiners in the North of England continued to rise in February. Moreover, the rate of increase was the sharpest in four months and quicker than those seen in the other three monitored parts of England. Staff shortages, demands for cost-of-living relief and efforts to attract high quality candidates were mentioned by respondents.

Recruitment agencies in the North of England recorded a monthly rise in hourly pay rates for temporary workers during February. The increase reflected efforts by clients to secure workers of a better calibre. That said, although the increase was sharp and marginally quicker than that seen for the UK overall, it was the slowest since April 2021.

On a regional basis, only the South of England registered a quicker increase in temp wages than the North of England during February.

Kate Shoesmith, deputy chief executive of the REC, said: “This is further proof of ongoing demand in the UK jobs market, coming on the back of our most recent Labour Market Tracker report which showed new job adverts in the UK at a 14-month high in February.”

Commenting on today’s report, she added: “As hirers work out what variable economic forecasts might mean for their business and staff, it is not that surprising to see temp billings in the North of England outpace the UK-wide trend.

“Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers – even when the economic outlook is unclear. Job openings for both temporary and permanent positions rose at their fastest rates for five months in this part of the UK. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay.

“What this latest report on Jobs shows is serious labour and skills shortages are not behind us. The economy stands to lose up to £39bn in GDP every year from 2024 unless business and government act now. Many businesses are doing what they can but the Spring Budget is the ideal opportunity to find a way forward together. The Chancellor must put people issues first, with innovative and refreshed policies on skills and tackling economic inactivity, and from immigration to childcare.”

The KPMG and REC, UK Report on Jobs: North of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.

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