Economic uncertainty restricts hiring activity in the Midlands - report
18 September 2023
Sustained economic uncertainty and cautious recruitment policies continued to hinder hiring activity in the Midlands, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.
Recruiters registered the sharpest reduction in permanent staff appointments since May 2020 when the COVID-19 pandemic was at its peak.
That said, recruiters displayed some confidence in temp billings, which rose for the third consecutive month.
There were marked increases in the availability of both permanent and temporary staff, with the former rising at the steepest rate since December 2020 amid increased redundancies.
Pay pressures in the Midlands also strengthened during August, as recruiters mentioned that clients were raising salaries in order to attract staff, although there were mentions that the increased cost of living contributed to staff requesting higher pay levels.
The KPMG and REC, UK Report on Jobs: Midlands is compiled by S&P Global from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.
Recruitment consultancies based in the Midlands signalled a reduction in the number of people placed in permanent roles for the ninth consecutive month in August.
The rate of contraction accelerated sharply on the month and was the steepest recorded since May 2020. Moreover, the drop in the Midlands was the sharpest of the four monitored English regions.
August survey data signalled a rise in temporary billings in the Midlands for the third month in a row.
Midlands-based recruiters signalled a sharp slowdown in permanent vacancy growth midway through the third quarter.
Temp vacancies also expanded at a slower pace during August.
Adjusted for seasonality, the Permanent Staff Availability Index posted well above the neutral 50.0 threshold to signal an increase in permanent candidate numbers in the Midlands. The rate of growth was robust, the strongest seen since December 2020 and above the national average.
The supply of short-term workers in the Midlands increased again midway through the third quarter, thereby stretching the current sequence of accumulation to four months.
The rate of decline eased from that seen in July but remained strong overall. The rise in the Midlands was the second-softest of the four monitored English regions, ahead of the North of England.
Salaries awarded to new permanent joiners in the Midlands increased again in August.
The rate of pay growth accelerated to a three-month high but remained softer than the levels seen over much of the past two years.
Kate Holt (pictured), people consulting partner for KPMG in the Midlands said: “It is unfortunate to see another month in which the number of permanent job roles has fallen sharply in the midst of continuing economic pressures faced by firms across the Midlands.
"These pressures are hampering hiring plans on a permanent basis but allowing for a rise in temporary roles and positions.
“Another glimmer of hope is that firms are offering up better salaries to potential candidates in an effort to attract them and take into account the cost of living crisis."
