Lancashire Times
A Voice of the Free Press
1:00 AM 13th November 2023

KPMG And REC, UK Report On Jobs: Signals A Further Deterioration In Hiring Activity


Image by Gerd Altmann from Pixabay
Image by Gerd Altmann from Pixabay
The latest KPMG and REC, UK Report on Jobs: North of England survey signalled a further deterioration in hiring activity in October, with a solid fall in the number of permanent staff placements. Temp billings also declined, albeit modestly, after briefly returning to growth in September.

Further improvements were seen in the availability of both permanent and temporary workers in October. That said, rates of expansion slowed compared to September, with permanent staff supply increasing at the softest pace for five months.

October saw pay pressures for permanent staff ease further, with starting salaries rising at the slowest pace since April 2021. Conversely, short-term staff experienced a stronger rise in wage rates compared to September.

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.

Sustained and solid contraction in permanent placements

October data signalled a fourth consecutive monthly contraction in permanent staff appointments across the North of England. Recruiters often blamed the sustained downturn on cautious hiring plans amid weakened market conditions and generally lower activity levels at clients. Although still solid overall, the pace of decline eased fractionally compared to September.

The reduction in placements in the North of England was broadly in line with the average seen across the UK as a whole.

After a renewed rise in September, billings received from the employment of short-term staff declined moderately in the North of England during October. The respective seasonally adjusted index fell into contraction territory for the fifth time in the past six months and signalled a modest rate of decline overall.

Compared to the other monitored English areas, the North was the worst performing and the only region to register a deterioration in temp billings in October.

Vacancies in the North of England continued to increase in October, and at the fastest rates of all four monitored English regions.

Permanent staff vacancies rose for the thirty-third successive month. Although quickening from September, the rate of increase was moderate overall.

Temp job openings across the North of England also rose, thereby extending the current sequence of expansion to three years. The rate of increase slowed from the previous month, remaining below the historic trend.

Softest upturn in permanent staff supply for five months

Recruiters in the North of England registered a sustained improvement in the availability of permanent staff in October, stretching the current sequence of growth to eight months. Anecdotal evidence highlighted that the increase in staff availability was often due to redundancies and company restructuring.

Though sharp, the rate of expansion was the slowest in five months and weaker than those seen in the three other monitored English areas.

The availability of temporary staff across the North of England increased for an eighth consecutive month in October, and at a marked rate. Some recruiters noted that a number of candidates were more willing to carry out temp work, while others attributed the uptick in supply to relatively subdued demand for short-term staff among employers.

However, the North of England recorded the weakest expansion in temp candidate numbers of all four monitored English areas in October.

Slowest increase in starting salaries since April 2021

October survey data pointed to another monthly rise in starting salaries awarded to permanent staff in the North of England. The uptick was driven by increased competition for skilled workers, with demand for suitably-skilled staff continuing to outweigh supply, according to recruiters. The sharp increase in permanent salaries was broadly in line with the UK average, with a faster rise only registered in London.

That said, the rate of starting salary inflation was the slowest seen since April 2021.

Short-term staff in the North of England saw their hourly wage rates increase in October, extending the current sequence of pay growth to nearly three years. The pace of inflation was strong overall, having picked up notably compared to September to register the most pronounced rise across all four monitored English areas. Recruiters often mentioned there was an increased willingness among employers to pay higher rates for temp staff in October amid the rising cost of living.

Ian Beaumont
Ian Beaumont
Commenting on the latest survey results Ian Beaumont, Office Senior Partner for Newcastle at KPMG UK, said:

“Despite a rise in vacancies and an increase in permanent staff we are still seeing a fall in permanent staff placements across the North. The issue at hand is that we have people who want to work but they do not have the skills needed for the roles that exist. This is why we continue to see a rise in starting salaries, as organisations scramble to access top tier talent. The competition for skilled workers in areas that are in high demand is likely to continue until we address the crux of the problem through reskilling and upskilling programmes.”

Neil Carberry
Neil Carberry
Neil Carberry, Chief Executive of the REC, said:

“In many ways, the labour market is marking time waiting for the brakes to be taken off growth by the Bank of England. While permanent hiring is now declining more softly, temporary hiring continues to pick up some of the slack in recent months - with rising wages. While the rate of pay growth has now returned to more normal parameters, it is still strong, especially in sectors where staff remain in short supply in the North of England such as blue collar and accounting/financial. Looking to the Autumn Statement, businesses and Government need to be aware that the return of growth will reveal shortages more widely – action on skills, welfare-to-work programmes and immigration reform will be needed to prevent a return to growth being squandered.

"Healthcare providers are ramping up their hiring ahead of the winter, but candidate supply is short. Agency medical staff are keeping wards open and getting patients treated - they need a bit more support from Government. Reforming capped on-framework agency rates so pay for temps working on-framework can rise for the first time in four years will save Government money as they will end up using far fewer emergency shifts, and it will reward a part of the NHS workforce that is too often overlooked.”