The latest KPMG and REC, UK Report on Jobs: North of England indicated that recruitment activity picked up midway through the first quarter of 2020. Permanent placements and temp billings both expanded at quicker rates, which was often linked to improved market confidence following last year’s election. Furthermore, vacancy growth quickened for both permanent and temporary roles during February. At the same time, the supply of permanent workers rose for the first time since the start of 2013. Improved demand for staff meanwhile placed greater upward pressure on pay, with starting salaries increasing at the sharpest rate of seven months.
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.
Fastest rise in permanent staff appointments for over two years
Recruiters in the North of England reported a further rise in permanent placements during February, extending the current run of increase to six months. Moreover, the rate of growth accelerated for the third time in as many months to reach the fastest for just over two years. Panellists cited improved demand for workers due to a more stable political environment and greater confidence regarding Brexit. On a regional basis, permanent staff appointments rose in three of the four monitored English regions, led by the North of England. London was the only region to register a decline in permanent placements during February.
Temporary billings in the North of England rose further during February. Notably, the latest increase was the fastest for five months and solid overall. When explaining the result, some recruiters suggested that improved clarity surrounding Brexit had boosted demand for temporary staff. In contrast, temp billings fell slightly at the national level for the second month running, driven by falls in the Midlands and London.
Both permanent and temporary staff vacancies in the North of England continued to rise during February. The increase in demand for permanent workers extended the current run of growth that began ten-and-a-half years ago, with the pace of expansion accelerating to the fastest since May 2019. The rise was marked overall and sharper than the UK average. Demand for temp staff also grew at the quickest rate since last May. The marked increase was faster than the national average.
First increase in permanent labour supply for over seven years
The availability of permanent staff across the North of England increased in the latest survey period. Though only modest overall, the reading represented the first improvement since January 2013. A number of recruiters suggested that upcoming IR35 legislation and increased certainty around Brexit had led to greater willingness to pursue and move roles. Across the UK as a whole, permanent candidate numbers declined at the slowest rate since mid-2013. Softer falls were registered in the Midlands and the South of England, while London recorded a slightly quicker rate of contraction.
Following a slight contraction in January, temporary labour supply in the North of England expanded in February. The result marked the third expansion in the past four months. The rate of growth was moderate overall, but contrasted with a further reduction in temp candidate supply at the national level. Some panel members commented that the upcoming IR35 reforms had contributed to higher short-term candidate numbers. On a regional basis, the North of England was the only area to record an increase in temp labour supply, as further declines were seen in the Midlands and the South of England, while candidate numbers stagnated in London.
Sharpest rise in permanent starters pay for seven months
Starting pay awarded to permanent workers in the North of England continued to rise during February. Moreover, the rate of inflation accelerated to the quickest for seven months and was sharp overall. Some recruiters mentioned that higher pay was driven by increased demand for workers. Starting salary inflation also quickened at the UK level, with all four monitored English regions stronger expansions.
Remuneration awarded to temporary staff in the North of England continued to rise in February, extending the current run of inflation that began in September 2012. Although the latest increase was fractionally faster than that registered in January, it remained historically subdued and was softest of all four monitored English regions. Nonetheless, the rate of temp pay growth also remained relatively 
muted at the national level.
Commenting on the latest survey results, Jennifer Lee, head of KPMG’s Liverpool office, said:
“While the ‘Boris bounce’ continues to be felt in the loosening of the national job market, it’s worth noting that prospects in the North have steadily been on the increase for the last six months. Indeed, a third month of accelerated recruitment indicates that businesses are indeed investing for growth.
“This ongoing investment in talent also brings with it added resilience and agility, which northern businesses will need to capitalise on any announcements in next week’s Budget. However, looking ahead, the current big unknown is the impact and influence the coronavirus may have on market confidence, let alone the lingering uncertainty around the actual Brexit deal.”