‘Unprecedented’ drop in permanent job placements across Midlands

A report released today has highlighted an unprecedented drop in permanent staff appointments across the Midlands in April, as the coronavirus disease 2019 (COVID-19) pandemic continued to hit the jobs market.

Meanwhile, temporary billings also declined at the quickest rate recorded since the survey’s inception in October 1997, with the fall in the Midlands the sharpest across the four monitored English regions. Vacancies for both permanent and temporary staff fell at unparalleled rates, while muted demand for candidates led to marked reductions in pay rates.

The report is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.

Unprecedented reduction in permanent placements
For the second time in as many months, recruitment consultants across the Midlands recorded a fall in permanent staff appointments during April. The seasonally adjusted Permanent Placements Index dropped 30.4 points on the month to the lowest level in over 22 years of data collection, and signalled an unprecedented rate of decline. Anecdotal evidence overwhelmingly blamed the drop on impacts stemming from COVID-19, including staff lay-offs, company closures and quarantine measures.

April data signalled a third successive reduction in temporary billings across the Midlands, with the rate of decline the most marked since the series began in October 1997. As was the case for permanent placements, respondents linked the fall to the COVID-19 outbreak.

The Midlands recorded the sharpest decline in temp billings across the four monitored English regions.
Permanent vacancies across the Midlands fell for the second month running in April, with the rate of decline the most marked since the series began in October 1997. The reduction in the Midlands was slightly softer than that recorded at the UK level, however.

At the same time, temporary vacancies across the Midlands declined further during April. The rate of reduction was the quickest on record, albeit not as steep as that seen for permanent vacancies.

First increase in permanent staff availability in seven years
Permanent staff availability rose during April, thereby ending a survey record 83-month sequence of consecutive monthly falls. Furthermore, the rate of expansion was the fastest since September 2009 and marked overall. Respondents frequently noted that redundancies and job cuts amid the COVID-19 pandemic had led to a huge increase in the number candidates.

Across the four monitored English regions, the Midlands reported the quickest rise.

Recruiters across the Midlands signalled the first improvement in the availability of temporary staff since June 2013 during April. As was the case for permanent staff supply, respondents linked the increase to job cuts and lay-offs stemming from COVID-19. The rise was the most marked since August 2009.

The increase in temp labour supply in the Midlands was the softest across the four monitored English regions, however.

Permanent salaries decline markedly in April
April data highlighted the first reduction in salaries awarded to permanent new joiners in the Midlands for seven-and-a-half years during April, amid reports of a slack labour market and falling vacancies in the face of emergency measures to halt the COVID-19 pandemic. Moreover, the decline was the most severe in over 22 years of data collection.

Following more than seven years of consecutive monthly increases, average hourly pay for short-term staff fell during April. Panellists reported that firms were reducing rates due to COVID-19. The rate of decline was the quickest recorded since the series began in late-1997 and was marked overall.

Across the four monitored English regions, only London recorded a sharper reduction in temp hourly pay than the Midlands.

Kate Holt, people consulting partner at KPMG, said: “As the COVID-19 pandemic continues, its effects are being felt heavily by many, both across the Midlands and nationally, particularly by those looking for jobs and those in recruitment.

“A few months ago we were talking about permanent salaries being on the rise and the war for talent as permanent candidate availability wasn’t matching the demand locally. However, now things have shifted as uncertainty has once again caused businesses to pause hiring plans and focus on navigating through the current crisis.

“All eyes will be on the Government’s forthcoming announcement on easing restrictions so confidence in the jobs market can start to rebuild.”

Neil Carberry, chief executive at the REC, said: “These numbers set records in all the wrong ways – but they are not unexpected, given the lockdown and the hit the economy is taking. While fighting the virus must remain our priority, the strain the lockdown is placing the economy under cannot be sustained indefinitely without very significant and long-lasting effects on unemployment and job creation.

“The good news is that the capacity for our economy to recover quickly is definitely there – but we won’t get back to strong growth instantly when the lockdown eases. Government needs to work with businesses to ensure that the support they have offered tapers out as the economy returns to normal, rather than leaving firms facing a cliff-edge and having to cut costs quickly through things like higher redundancies. This approach will also allow firms to invest in the future – creating new jobs to drive the economy and help the UK bounce back.”