Permanent staff appointments fall further, but at slower rate - report

Hiring activity declined further in February, with recruitment agencies in the region noting recruitment freezes at clients, economic uncertainty and a lack of candidates, reported KPMG.

The KPMG and REC, UK Report on Jobs: Midlands survey, compiled by S&P Global, showed that permanent placements fell at a slower rate than in January, although temp billings declined the most since mid-2020.

An ongoing shortfall in candidates contributed to the latest drop in hiring activity, linked by respondents to peoples' greater reluctance to move roles given the current economic uncertainty. T

hat said, permanent and temp candidate supply both fell to weaker extents than at the start of 2023.

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 in the Midlands fell for the third month running in February, the longest downturn since the first wave of the COVID-19 pandemic in 2020.

Respondents noted recruitment freezes at clients, economic uncertainty and a lack of candidates. The rate of reduction in the Midlands was faster than the UK average, but eased from January's two-year record.

Billings received from the employment of temporary staff in the Midlands declined further in February. Moreover, the latest reduction was the fastest since June 2020.

Anecdotal evidence indicated that billings fell due to the non-replacement of temporary posts following departures, caution among clients and quiet periods due to economic uncertainty. The Midlands was the only English region to record a fall in temp billings in February.

Demand for permanent staff in the Midlands rose for the twenty-fifth consecutive month in February. Moreover, vacancies rose at the fastest rate in six months, and one that was broadly in line with the long-run trend. Among the English regions, only the North registered a faster rise in permanent vacancies than the Midlands.

Vacancies for temporary staff also increased at a faster rate in February, albeit one that was slightly weaker than that seen for permanent roles.

Recruitment consultancies based in the Midlands signalled a slower reduction in temp candidate supply in February, following a marked drop in the opening month of 2023.

Average salaries awarded to newly-placed permanent staff in the Midlands increased further in February, thereby stretching the current sequence of rising pay to two years. Moreover, the rate of salary growth strengthened from January, which had been the slowest in the current sequence.

Commenting on the latest survey results, Kate Holt (pictured), people consulting partner for KPMG in the Midlands said: "The current economic outlook continues to impact hiring activity in the Midlands with permanent appointments falling further. ”

"Despite the rate of vacancy growth picking up, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. Vacancies are likely to continue outpacing appointments in the short term due to the decreasing candidate pool, however this is expected to change once the economic challenges have settled.

“As well as hiring experienced talent, employers are encouraged to continue to invest in upskilling current employees to build the workforce of the future. ”