Growth of permanent staff placements in the North of England eased further from August’s survey peak in the latest month, and was weaker than the UK average. Nonetheless, the overall rate of expansion in October remained sharp and was faster than the series long-run average. For the fifth month running, all four English regions monitored by the survey posted permanent staff placements growth. Rates of expansion eased in London and the South, but nonetheless remained robust. Conversely, the Midlands recorded the strongest increase since February 2011.
As with the trend seen for permanent staff placements, growth of temporary/contract staff billings in the North eased in October. That said, the rate of expansion remained robust and was stronger than that seen at the national level. Similarly, slower rates of temp billings growth were noted in London and the South, while temporary/contract staff billings in the Midlands increased at the strongest pace in the survey history.
October data indicated that permanent staff demand in the North increased at the second-fastest pace in the survey history, and one that was stronger than the UK average. Meanwhile, the growth rate for temp staff demand across the region accelerated to the fastest since February 2004 and remained stronger than the national trend.
Permanent candidate numbers fall sharply
Recruitment consultants in the North of England indicated that permanent staff availability dropped for the ninth straight month in October. Moreover, the overall pace of contraction was sharp and the quickest in three months. Permanent candidate availability also dropped in the other three monitored regions, with the fastest declines registered in London, the South and the Midlands respectively. At the UK level, the availability of permanent workers decreased at the sharpest rate in almost six years.
Around 26% of panellists in the North of England reported worse temp availability in October, compared with 17% that saw a rise in supply. Consequently, temp supply fell for the first time in three months. The rate of contraction was, however, modest and weaker than that recorded at the national level. Lower temp supply was also noted in the other three English regions. Rates of contraction were sharp in London and the Midlands and solid in the South. Subsequently, at the UK level temp staff availability declined at the quickest pace since June 2007.
Rate of permanent salary inflation accelerates, while growth of temp pay rates eases
The rate of salary inflation in the North of England quickened further from September to the fastest since February 2008, taking the current sequence of gains to 20 months. Moreover, it was equal to the rate seen across the UK as a whole in October. Among the four surveyed English regions, the strongest rise in permanent salaries during October was registered in the Midlands, followed by the North, London and the South respectively.
Temp hourly pay rates in the North increased for the fourteenth successive month in October. The latest rise was, however, only marginal and the weakest in four months. Temp pay rates increased at weaker rates in three other English regions during October. Consequently, the average pace of wage growth across the UK eased to the slowest in four months. The fastest rise was noted in the Midlands, and the slowest in the North.
Comments:
Chris Hearld, senior partner for KPMG in Yorkshire, said: ““On the face of it, the latest figures for the North are great news, with higher numbers of job opportunities emerging alongside the sharpest increase in permanent wages for almost 6 years, as demand continues to strengthen. Whilst this is a sure sign of economic recovery, we must not get complacent because, in the highest earning bracket, left unchecked wage inflation will bring different challenges to businesses who strive for profitable growth.
“Another question that must be addressed revolves around whether increasing salaries are enough to entice job hunters to move between organisations. All the evidence suggests not, with permanent and temporary staff availability falling in recent months. It means employers cannot rely on wages alone as a hook to attract top talent. The time has come for them to develop a raft of offers as part of the overall remuneration package. If they fail to do so, they will struggle to recruit and bring their organisation back to pre-downturn levels.”
REC chief executive Kevin Green said: “This is another month of growth for both temporary and permanent jobs, in all regions, in all sectors and now across both the private, and public sectors. The real good news for workers is that starting salaries have risen at the sharpest rate in 6 years – however this is the result of a six year low in the availability of staff to fill the number of jobs available. The skills shortage shows no signs of abating and although it is starting to drive wages up there is a real danger that it could cause serious damage to future economic growth in the UK.
“Recruiters are also telling us that the hiring process is starting to pick up speed as employer confidence returns, which should lead to greater fluidity returning to the jobs market and greater opportunities for those looking to enter the jobs market or make the next step up in their career.”
