Permanent staff appointments fall at softest rate for six months - report

Recruitment activity declined midway through the second quarter of 2023 as firms continued to highlight that a weaker economic climate had contributed to hesitancy in committing to new staff hires.

That 's according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.

The report adds that permanent placements fell at the softest rate in the current six-month sequence of reduction. Temp billings meanwhile, fell at a solid pace that was stronger than that seen in April.

Recruiters also signaled an improvement in candidate supply for both permanent and temporary roles during May, with the latter rising for the first time since February 2021.

However, competition for scarce workers and efforts to fill vacancies - which rose once again in May - led to sustained upturns in starting pay. As such, permanent starting salary inflation reached a six-month high.

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 roles across the Midlands fell for the sixth successive month in May. The reduction in the Midlands was only marginal however, and the softest of the four monitored English regions.

Demand for permanent staff continued to rise midway through the second quarter. The rate of vacancy growth quickened on the month and was considerably sharper than that seen at the national level.

Temporary job openings also expanded at a solid pace during May, though growth softened from that seen in April to the softest for 28 months. Nonetheless, the upturn was the strongest across the four monitored English regions.

Average salaries awarded to new permanent joiners in the Midlands increased further in May, thereby stretching the current sequence of rising pay to 27 months. The rate of growth was marked overall and the steepest recorded since November 2022.

Average hourly pay for short-term staff in the Midlands rose for the thirtieth month in a row during May. The rate of growth quickened from that seen in April though was weaker than the national average.

Where higher rates of temp pay were registered, recruiters often attributed this to higher payments being offered due to the increased cost of living.

Kate Holt (pictured), people consulting partner for KPMG in the Midlands said: “The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns.

“Overall vacancy growth slowed as businesses delayed hiring decisions, but the continued salary inflation signalled positive times to come for the Midlands ' employment landscape as businesses continue to look for skilled candidates.

“For job seekers there was more demand for permanent workers in the tech, financial and accounting sectors. And while temporary vacancy growth slowed, there are still plenty of opportunities, especially for customer service and administration roles.

“It 's a tough time for employers, and what they really need is an upskilled and reskilled workforce which can move between sectors and quickly fill their vacancies. This will in turn aid economic recovery.

“The Government 's new Local Skills Improvement Fund scratches the surface of the problem, but more needs to be done to urgently address the UK 's widening skills gap. ”