Jobs report reveals sharp drop in permanent staff appointments during April

A new report compiled by KPMG and REC UK on Jobs pointed to a sharper reduction in permanent staff appointments at the start of the second quarter.

The decline was one of the most marked since the initial wave of the COVID-19 pandemic in 2020, as recruiters noted that the war in Iran and the subsequent rise in economic uncertainty had led employers to cancel or delay hiring plans.

However, temp billings increased again in April, as some panellists noted a preference for more flexible workers.

At the same time, vacancies continued to fall in the Midlands, with both permanent and temporary positions declining at steeper rates than those seen across the UK as a whole.

Additionally, the supply of both candidate types rose in April, albeit at weaker rates than those recorded nationwide. Turning to pay, rates of both starting salary and temp wage inflation quickened since March but remained historically subdued overall.

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.

The number of people placed into permanent job roles in the Midlands fell for a third straight month in April.

Higher staffing costs and recent changes to employment legislation were also cited as having suppressed recruitment.

Of the four tracked English areas, the Midlands along with the South of England were the only areas to record a decline in permanent staff appointments.

April data pointed to a rise in temp billings across the Midlands, thereby stretching the current sequence of increase to nine months. While the pace of growth moderated since March, it was strong overall.

Notably, the Midlands recorded the strongest rise in billings across the four tracked English areas.

Latest data pointed to further falls in both permanent and temp staff vacancies across the Midlands. Demand for permanent workers deteriorated markedly, with the pace of reduction unchanged from March and the joint-quickest in 14 months.

Temp vacancies meanwhile decreased for the fourth month running. The respective seasonally adjusted index rose from March's recent low, but nevertheless signalled a solid drop.

Vacancies across the Midlands fell at stronger rates than those seen across the three other monitored English areas.

The availability of permanent staff in the Midlands rose in April, thereby stretching the current run of increase to just over three years.

Temp staff supply rose for a second month running across the Midlands during April. Where an increase was recorded, recruiters often noted that company layoffs had pushed up candidate numbers, but also that more people were looking for flexible roles.

April survey data pointed to only a slight rise in starting salaries awarded to new permanent joiners across the Midlands. Notably, the respective seasonally adjusted index lifted only slightly above March's more than five-year low.

Latest survey data highlighted an increase in temp wages across the Midlands. Although weaker than the long-run average, the pace of inflation picked up to a four-month high and outpaced the UK-wide trend.

Andy Bostock (pictured), Birmingham office senior partner at KPMG UK, said: “April’s data suggests that employers in the Midlands are becoming increasingly cautious about making long-term hiring commitments.

“The sharpest fall in permanent placements for 16 months points to a market where higher staffing costs and changes to employment legislation are pushing businesses to delay decisions until conditions stabilise.

“Strikingly, though, demand has not disappeared altogether. The Midlands again recorded the strongest rise in temp billings of any English region, showing that many employers still need access to skills and capacity, but want to retain flexibility while the outlook remains unsettled.

“The labour market is still active, but caution is currently the dominating force shaping it, rather than confidence.”