Lancashire Times
A Voice of the North
5:00 AM 8th April 2021

Sharpest Rise In Permanent Placements Since January 2018

The latest KPMG and REC, UK Report on Jobs: North of England survey pointed to the quickest rise in permanent staff appointments for over three years during March. Similarly, temp billings increased at a sharper rate as demand for workers strengthened following the announcement of the UK’s roadmap to relaxing coronavirus disease 2019 (COVID-19) restrictions. On the pay front, permanent starters’ salaries rose for the first time in a year, while temp rates increased for the fourth month running. Meanwhile, the availability of temporary workers fell for first time since the start of 2020 and the rate of decline exceeded that for permanent candidates.

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.
Key findings
Stronger increases in permanent placements and temp billings
Demand for workers improves further
Permanent salaries rise for first time in 12 months

Data collected March 12-25

Sharpest increase in permanent placements since January 2018

Following February's rebound, there was a further increase in permanent staff appointments across the North of England during March. Moreover, the rate of growth accelerated to the quickest since January 2018 and was historically marked. Anecdotal evidence pointed to a broad-based improvement in demand for workers amid strengthening economic conditions. Hiring was also supported by the forthcoming reopening of leisure and hospitality businesses.

At the national level, permanent staff appointments grew at the strongest rate since April 2015. Across the four monitored English regions, the increase was broad-based and led by the Midlands.

Temporary billings in the North of England continued to rise at the end of the first quarter, extending the current sequence of growth to nine months. The latest increase was the strongest since December 2020 and sharp overall. Recruiters often noted that improved confidence at their clients had driven the rise in hiring activity.

Across the UK as a whole, temp billings also increased again, extending the current run to eight months. The rate of increase was the steepest since November 2017 and slightly quicker than that for permanent appointments. The Midlands saw by far the fastest upturn in temp billings across the four monitored English regions, and London the weakest.

Demand for both permanent and temporary workers in the North of England continued to rise during March. Building on a slight recovery in February, the rate of growth in permanent vacancies accelerated in the latest survey period. Notably, the pace of expansion was the quickest since July 2019, despite lagging the UK average. Meanwhile, demand for temporary staff in the North rose for the seventh month running and the sharpest rate since August 2017.

Permanent labour supply falls for the second month running

Following the first decrease for just over a year in February, there was another decline in permanent staff availability across the North of England in March. That said, the rate of reduction softened from the previous survey period and was only marginal overall. When explaining lower candidate numbers, some recruiters commented that workers were hesitant to change roles amid uncertainty surrounding the COVID-19 pandemic. At the national level, March data highlighted little change in permanent staff availability across the UK. There was regional divergence, as a renewed upturn in the Midlands and stronger growth in London contrasted with a fall in the South of England.

Temporary staff availability across the North of England fell during the latest survey period, ending a 13-month run of expansion. The rate of decline was only modest overall, but stronger than the UK average. As was the case with permanent staff availability, recruiters noted that candidates were unwilling to move jobs amid COVID-19 uncertainty. A similar trend was recorded at the national level, with temp staff supply also falling for the first time since before the UK COVID-19 restrictions began in March 2020. Across the four monitored English regions, the Midlands saw the quickest fall. London was the only region to register improved temp staff availability at the end of the first quarter.

Permanent starters' salaries rise for the first time in a year

Recruiters in the North of England reported an increase in remuneration awarded to permanent new joiners during March. The result marked the first rise in starting salaries for a year. However, the rate of pay inflation was the softest across the four monitored English regions and only marginal overall. Salary inflation was strongest in London.

As was the case in each of the previous three months, temporary wages paid to workers in the North of England rose during March. Moreover, the rate of inflation accelerated to the quickest since September 2019 and was marked overall. The increase was broadly in line with the UK average. Across the four covered English regions, the Midlands registered the steepest rate of temp wage inflation, followed by London.

Euan West
Euan West
Euan West, office senior partner for KPMG in Leeds, said: “The success of the vaccine roll-out and easing of lockdown restrictions is clearly having a positive impact on the North’s job market. Such a significant increase in permanent placements during the last month will offer encouragement to jobseekers across the region following an extremely challenging year. For employers, these findings show that they have been buoyed by the Government’s four-step roadmap and are eyeing a cautious return to relative normality in the summer. The rise in temp billings and permanent starters’ salaries similarly indicates another encouraging step on the road to economic recovery.”

Neil Carberry
Neil Carberry
Neil Carberry, Chief Executive of the REC, said: “For months, we have been talking about the potential recruiters saw for a recovery in hiring as we got on with vaccinations and the lockdown did its work. Today’s data shows that even during lockdown, our labour market was bouncing back. The strong temporary recruitment trend of the past few months has been maintained, but with a new addition – the fastest increase in permanent job placements since 2018 in the Midlands and North. Taken together with a long-awaited recovery in hiring in London, this is a sign that business confidence is starting to flow back, even at this early stage of unlocking.

“As companies start to recruit, they will need to appreciate that the labour market is still suffering from all sorts of shortages. So reviewing their hiring practices and doing things in the best way possible will matter more than ever. Inclusive hiring is not a tick-box exercise – it’s about finding the best candidate for the job no matter who they are, to help your business succeed. By working with professional recruiters, business leaders can help create fairer, more inclusive and more productive workplaces.”