- Modest rise in permanent staff appointments
- Vacancy growth remains relatively subdued
- Temp labour supply expands at quickest pace since May 2013
Summary
The latest KPMG and REC, UK Report on Jobs: North of England pointed to a softer rise in permanent placements in the region midway through the fourth quarter.
The report, which is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the North of England, revealed a modest increase in permanent appointments, as well as a lacklustre rise in temp billings. Demand for both permanent and temporary workers remained relatively subdued. Meanwhile, temp labour supply grew at the quickest rate since May 2013 amid incoming regulatory change.
Modest increase in permanent staff appointments
Recruiters in the North of England recorded another increase in permanent placements midway through the fourth quarter. Anecdotal evidence suggested that the rise was driven by stronger demand for workers. That said, the rate of growth softened from October and was modest overall. At the UK level, recruitment consultancies reported a ninth consecutive monthly fall in permanent staff appointments. The rate of decline eased to the softest since July and was only mild, however. Driving the latest reduction were falls in two of the four monitored English regions, led by the South of England.
November data pointed to a further rise in temporary billings across the North of England, extending the current run of expansion to four months. Although slightly quicker than that recorded in October, the rate of increase remained modest overall. Across the UK as a whole, temp billings also continued to rise. That said, the increase was the softest for three months and only marginal. At the regional level, growth was also reported in the Midlands and London, with former recording the quickest increase of all four monitored English regions. The South of England noted a second successive monthly decline, albeit modest.
Demand for both permanent and temporary workers in the North of England continued to grow midway through the fourth quarter. The latest rise in permanent vacancies was fractionally quicker than that registered in October, but remained modest overall. That said, the rate of growth was faster than the UK average. Meanwhile, demand for temporary staff increased at the quickest pace since July. The marked rise was the fastest recorded of the four monitored English regions.
Permanent staff availability falls at softer rate
Permanent staff availability in the North of England continued to decline midway through the fourth quarter. However, the rate of deterioration eased from October, when it was the quickest for four months. Some recruiters cited Brexit uncertainty when explaining the latest reduction in candidate numbers. At the national level, permanent candidate availability also continued to deteriorate, with the pace of decline accelerating to the fastest for five months and remaining marked overall. The reduction was driven by falls across all of the four monitored English regions, with the South of England posting the fastest rate of contraction.
Temporary labour supply in the North of England grew for the first time in four months during November. Though modest, the rate of improvement was the quickest since May 2013. The increase in the North of England was the only one seen across the four monitored English regions. Some recruiters suggested that upcoming changes to IR35 had driven the rise in availability. Across the UK as a whole, the supply of temporary candidates fell in November, with the pace of decline accelerating from October to a solid rate overall. Of the four monitored English regions, the Midlands reported the steepest rate of reduction.
Permanent starting salaries rise markedly
Permanent starters’ pay continued to increase midway through the fourth quarter, extending the current run of inflation that began in March 2012. The latest rise was the quickest recorded across the four covered English regions and sharp overall. Anecdotal evidence suggested that higher pay was needed to attract skilled workers. At the national level, permanent starting salaries rose in November, as has been the case in every month since May 2012. The latest increase was solid, albeit the slowest for almost three years. All of the four monitored English regions reported a rise in permanent starters’ pay.
Remuneration awarded to temporary workers in the North of England rose further in November. However, the rate of inflation eased for the fourth month in a row to reach the softest since February 2018. Moreover, the increase in temp pay was the slowest recorded of all four monitored English regions. Across the UK as a whole, November data highlighted a further increase in average hourly pay for temporary workers. The rate of wage inflation eased, however, and was the slowest for three years. The South of England recorded the strongest rate of pay growth.
Comment
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ennifer Lee, Head of KPMGs Liverpool office, said: “It has turned a little frosty for the Northern jobs market as we head into a festive period gripped by a general election and an impending Brexit deadline. The figures show that employers in the region are more confident than much of the rest of the country in making new hires, but the growth is relatively modest when compared to previous months. We don’t expect the thaw to set in until the new year when the outlook for many businesses becomes clearer.”
Recruitment & Employment Confederation chief executive Neil Carberry said: “Today’s figures show exactly why this election needs to focus on work. The jobs market is still strong, but uncertainty is taking its toll. In the North, permanent placements have increased again but vacancies growth is around its weakest for a decade. Any incoming government must move quickly to boost business confidence and implement policies that will help companies and individuals to make great work happen.
“With that in mind, it was good to hear Sajid Javid say that a Conservative government would review the planned changes to IR35 if they win the general election, alongside similar commitments from Labour and the Liberal Democrats. Everyone should pay the right amount of tax – and that must mean thinking again and stopping 2020 implementation. Contractors and the self-employed are a vital part of the UK’s flexible labour market, and current implementation plans risk rewarding those who avoid tax whilst punishing hundreds of thousands of compliant contractors and agencies. It is essential that these tax changes are only brought in when it’s clear they can be implemented effectively, with proper regulation of umbrella companies and effective enforcement.”