Economic uncertainty continues to dampen hiring activity in Midlands - report

Lingering economic uncertainty and cautious recruitment policies continued to dampen hiring activity in the Midlands, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.

Recruiters registered quicker falls in both permanent placements and temp billings, while there was a fresh increase in the supply of permanent staff.

Growth of demand for permanent workers softened, hitting its lowest for over two years. This contrasted with a sharp and accelerated rise in temp vacancies. Pay pressures showed further signs of moderating, most notably for temp wages which increased at the softest rate for two years.

Recruitment consultancies based in the Midlands signalled a reduction in the number of people placed into permanent roles for the fifth successive month in April. The rate of contraction quickened notably on the month and was solid overall. That said, the drop was slightly softer than that seen across the UK as a whole.

Anecdotal evidence indicated that permanent staff appointments fell due to more cautious hiring policies at clients. There were also some reports that candidate shortages had impacted recruitment efforts.

Permanent staff appointments fell across all four monitored English regions, with London seeing by far the sharpest reduction.

April survey data signalled a decline in billings received from the employment of short-term staff in the Midlands for the fourth month in a row. Though moderate, the rate of contraction was quicker than that seen in March.

Midlands-based recruiters signalled a further slowdown in permanent vacancy growth at the start of the second quarter. Notably, the rate of expansion was the softest seen since February 2021.

In contrast, temp vacancies expanded at a sharp and accelerated pace that outstripped the UK-wide average.

Adjusted for seasonality, the Permanent Staff Availability Index posted above the neutral 50.0 mark to signal the first improvement in permanent candidate numbers in the Midlands for five months.

The supply of short-term workers in the Midlands decreased again at the start of the second quarter, thereby stretching the current sequence of deterioration to 26 months. The rate of decline was quicker than that seen in March, but moderate overall.

Salaries awarded to new permanent joiners in the Midlands increased again during April. The rate of pay growth edged down to a three-month low but remained sharp in the context of historical data.

Average hourly wages for temp staff in the Midlands increased for the twenty-ninth consecutive month in April. There were a number of reports that greater competition for scarce staff and the rising cost of living had pushed up wages.

Kate Holt (pictured), people consulting partner for KPMG in the Midlands, said: “April 's data is evidence that many employers across the Midlands are in need of new talent.

“There are also a number of people who want new roles with greater development opportunities and pay - highlighted by the rise in available permanent staff.

“However, placements are still falling which means there is a disconnect between what workers want and what employers are offering.

“In this age of 'great resignation ' and 'quiet quitting ' more and more people will be looking for job satisfaction on top of good benefits and hiring managers will have to go a step further to show that they can provide this to potential candidates. ”