Yorkshire sees decline in permanent placements ease during June

The latest KPMG and REC UK Report on Jobs points to a softer decline in recruitment activity during June.

Both permanent placements and temporary billings fell at slower rates compared to May, albeit still sharply overall.

Reductions were predominantly driven by another steep contraction in demand for workers amid the pandemic.

However, the drop in vacancies eased for the second month running. 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 region reported another sharp reduction in permanent staff appointments during June.

The result extended the current sequence of decline that began when lockdown restrictions were first introduced during March. The rate of contraction was much softer than those registered in April and May.

Across the UK as a whole, permanent staff appointments declined for the fourth time in as many months in June.

Temporary billings decreased for the fourth month in a row during June. Though historically marked, the rate of contraction eased for the second month running to reach the softest since March.

The decline was also slower than that seen across the UK as a whole. Recruiters often associated the latest reduction in temp billings with weaker demand for workers.

Demand for both permanent and temporary staff across Yorkshire continued to deteriorate in June, but rates of decline eased in both cases.

Permanent vacancies fell for the fourth month in a row, and although the pace of contraction was sharper than the UK average, it eased to the slowest since March. Meanwhile, demand for temporary workers fell at a softer rate than at the national level, albeit still markedly overall.

Permanent staff availability continued to soar at the end of the second quarter. In fact, the rate of growth accelerated to the second-sharpest in nearly 23 years of data collection (behind December 2008).

Anecdotal evidence suggested the surge in labour supply was driven by widespread coronavirus-related redundancies.

The availability of permanent candidates across the UK as a whole also rose further, with the rate of expansion the quickest since January 2009. The North of England recorded the most marked rise.

June data pointed to another sharp increase in temporary staff availability across the North of England. Moreover, the rate of expansion accelerated for the fourth month in a row to reach the quickest since May 2009.

Recruiters in the region recorded a sharp decline in permanent starting salaries for the third month in a row during June.

The rate of reduction was slightly quicker than that registered in May, and close to April’s recent record.

Remuneration awarded to temporary staff in the North of England continued to fall in June.

Though sharp overall, the rate of reduction eased for the first time in the current four-month sequence of decline and was softer than the UK average.

Commenting on the latest survey results, Euan West, office senior partner for KPMG in Leeds, said: “Despite an inevitable further drop in hiring activity for permanent and temporary staff, it is encouraging to see they both fell at softer rates than seen in April and May.

“However, the air of uncertainty around the COVID-19 pandemic will linger – and rebuilding confidence in the region’s jobs market will take time.

“All eyes will be on the Chancellor’s fiscal statement today, with job seekers hoping to see a focus on skills and retraining, while business will welcome further support packages so they can start to ramp up as lockdown eases, and recovery gets underway.”

Neil Carberry, chief executive of the REC, said: “While there are signs that the worst declines are behind us, today’s figures show it will be a while yet before we see job placements growing month on month.

“That’s no surprise, as businesses are focusing on bringing furloughed staff back to work, or making redundancies where they cannot be avoided.

“Recruiters will be key to helping those who lose their roles find new work – there are always vacancies out there for job seekers, though they are at a lower level than normal right now.

“This is now a jobs crisis. Rishi Sunak should use today’s Summer Statement to boost job creation, with a cut in National Insurance designed to retain jobs and boost hiring.”