Permanent placements rise at softer pace across Midlands - KPMG

According to the latest KPMG and REC UK Report on Jobs, the Midlands highlighted a softer, yet still rapid increase in the number of permanent staff appointments at the end of 2021, despite sustained reports of a shortage of suitable candidates.

The Report on Jobs is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands and proves a comprehensive guide to the UK labour market.

The number of permanent staff appointments across the Midlands continued to increase at a marked rate in December. The rate of increase softened slightly from November, though remained among the highest the survey has ever recorded. Panel members often linked hiring to stronger market confidence and increased demand for permanent staff. At the regional level, the uptick in permanent placements in the Midlands was the second-fastest of all monitored English regions, behind the North of England.

Temporary billings in the Midlands rose for the eighteenth time in as many months during December. Moreover, the rate of the increase quickened from the previous survey period and was steep overall. Anecdotal evidence suggested that higher demand meant firms took on temporary staff where permanent roles could not be filled. Temp billings also increased at the UK level, while the upturn in the Midlands was the weakest of the four monitored regions.

December data highlighted a sustained increase in the number of permanent vacancies across the Midlands. Though marked overall, the rate of increase eased for the fourth successive month and was the softest of all monitored regions.

At the same time, demand for temporary staff continued to expand robustly. That said, the rate of increase eased to the softest since February. Moreover, the rise in the Midlands was the weakest of the four monitored English regions.

Recruiters in the Midlands signalled a further reduction in the availability of permanent staff at the end of 2021. A lack of experienced candidates and elevated uncertainty surrounding the jobs market making staff unwilling to move between roles contributed to lower availability, according to panellists. While the rate of reduction was still marked, it was the softest recorded for seven months.

Temp staff availability across the Midlands fell for the tenth consecutive month during December. The rate of decline eased for the fourth month in a row to reach the softest since May. According to anecdotal evidence, there were widespread candidate shortages due to a lack of skilled workers looking for temporary work. The reduction in the Midlands was the second-softest of the four monitored regions, behind London.

Salaries awarded to permanent new staff increased for the tenth month in a row in the latest survey period. The rate of the rise eased from November's series record, yet remained rapid overall. Panellists attributed higher salaries to efforts to attract staff amid high demand for experienced candidates. Of the monitored regions, the Midlands recorded the second-slowest increase, ahead of London.

Recruiters across the Midlands reported a thirteenth consecutive monthly rise in average hourly pay rates for short-term staff during December. The rate of temp wage inflation eased from the record rise in November to the softest for six months, though remained robust overall. The rise in temporary pay rates was the second-slowest of the monitored regions, and slower than the national average.

Kate Holt (pictured), people consulting partner at KPMG, said: “The continued uptick in permanent placements and temporary billings reflects the strength of business confidence locally, which is encouraging for those looking for work in the Midlands. However, the war for talent shows no signs of abating, and this is evidenced by wage inflation as businesses compete to attract candidates - particularly for permanent roles.

“While 2021 was dubbed as 'the great resignation ', the labour market is typically more fluid in January and with more businesses offering hybrid and flexible working options, it 's possible that the candidate supply issues we 've seen for some time could start to ease in the coming months. ”

Neil Carberry, chief executive at the REC, said: “2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue. This survey shows again how tight the labour market was at the end of last year. Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling. These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021.

"Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce. Recruiters are ideally positioned to help employers with this, and support governments across the UK on the skills, immigration and tax reforms that are needed to keep us competitive."