12 Feb 2024

Permanent staff appointments fall markedly at start of 2024 – report

KPMG - Kate Holt.png

The latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global showed a weak picture for recruitment activity in the Midlands at the start of 2024.

Firms signalled a marked reduction in permanent placements that was little-changed from that seen in December, while temporary billings fell at the fastest pace since June 2020.

Survey respondents highlighted that recruitment freezes and cautiousness among clients weighed on permanent hiring, while other firms mentioned muted demand for temporary staff.

Recruitment firms signalled sustained improvements in candidate supply for both permanent and temporary roles during September, however a lack of suitably skilled staff and increased competition contributed to sharp rises in starting salaries.

That said, pay growth was at the softest since last June while wage growth for temporary staff also eased.

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 second successive month in January. The rate of contraction eased only fractionally from that seen in December and remained sharp overall.

The reduction in the Midlands was the most marked of the four monitored English regions.

For the second time in as many months, billings received for temporary work by recruiters based in the Midlands decreased. The reduction in January quickened on the month and was the steepest recorded since June 2020.

Demand for permanent staff rose at a softer rate at the start of 2024. Vacancy growth was only modest and the weakest since last September. That said, the expansion contrasted with a sustained fall at the national level.

Temporary job openings meanwhile expanded at a modest pace during January, with the rate of growth picking up slightly from the previous survey period.

The seasonally adjusted Permanent Staff Availability Index signalled a tenth consecutive monthly rise in permanent candidate numbers in the Midlands in January.

Salaries awarded to new permanent joiners in the Midlands increased further during January, thereby stretching the current sequence of rising pay to 35 months. The rate of growth was sharp, yet slowed to the softest since last June. According to panellists, starting salaries had increased amid competition for suitably skilled staff.

Regional rankings showed recruiters in the Midlands signalled the second-softest rate of salary inflation, ahead of the South of England.

Average hourly pay for short-term staff in the Midlands rose for the thirty-eighth month in a row in January. The rate of growth eased markedly from that seen in December to dip below the national average.

All four monitored regions saw rising temp pay rates, with the increase in the Midlands the joint second-strongest overall (matching that seen in the capital).

Kate Holt (pictured), people consulting partner for KPMG in the Midlands said: "The Midlands job market had a muted start to the new year with a decline in both permanent and temporary staff hiring.

“Pockets of redundancies and hiring pauses across several industries in the region resulted in increased job seeker numbers.

“These factors partnered with economic headwinds also resulted in downward pressure on wages because employers have a wider pool of candidates to choose from.

“All eyes will be on the upcoming Spring Budget as businesses and job seekers alike await regulatory change that will stimulate economic growth and allow the region’s job market to improve.”

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