Jobs market: Permanent placements increase for first time since February

A report out today has revealed the first increase in permanent staff appointments across the Midlands since February, with looser lockdown restrictions linked to the uptick.

The latest KPMG and REC, UK Report on Jobs: Midlands also shows that temp billings increased for the second month running, with the latest rise the most marked since late-2018.

Growth in candidate supply continued in August, with the rates of increase in both permanent and temporary candidate availability marked despite easing. Demand and supply imbalances continued, however, with permanent vacancies declining. Subsequently, there was further downwards pressure on pay.

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

The Midlands was one of only two regions, across the four monitored, to register an increase in permanent placements during August, alongside the South of England.

August survey data highlighted a fifth successive monthly rise in the availability of permanent candidates in the Midlands. The increase eased from July’s unprecedented rate, but was still rapid. Redundancies and restructuring efforts at companies led to a greater number of job seekers.

That said, the Midlands recorded the softest increase in permanent staff supply across the four monitored English regions.

As has been the case in each month since April, the supply of temporary staff in the Midlands increased during August. Anecdotal evidence frequently associated the latest rise to a surge in the number of job seekers amid widespread layoffs and contract terminations due to the COVID-19 pandemic. The rate of expansion softened from July’s near-record pace, but was still marked.

Salaries awarded to permanent new joiners in the Midlands continued to fall in August, extending the current sequence of decline to five months. The pace of reduction in salaries was the fastest since May and sharp overall. Respondents linked the fall with firms’ attempts to reduce their costs, whilst also mentioning that a greater volume of available staff had squeezed salaries.

A fifth consecutive fall in wage rates for short-term staff in the Midlands was recorded in August. A higher volume of job seekers had put downward pressure on pay; the rate of decline was the quickest since May and solid.

Temp wages also declined at the UK level during August, with the pace of the fall matching that seen in the Midlands.

Kate Holt, people consulting partner at KPMG, said:“With the latest data showing a recruitment rebound across the Midlands, it’s positive to see an uptick in hiring activity in what is a particularly challenging market. However, whilst temporary vacancies continue to gain traction, there’s still a level of uncertainty that recruiters and businesses are weighing up and this is reflected in the reduced number of permanent vacancies, as well as a reduction in salaries.

“That being said, it’s encouraging to see that local businesses are hiring and supporting the economy as the region starts to focus on recovery.”

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