Slowest rise in permanent placements for 16 months - KPMG

Permanent job placements in the Midlands rose at its softest pace for 16 months, according to new figures.

The latest KPMG and REC, UK Report on Jobs: Midlands survey highlighted a slower rise in the number of permanent placements in the region at the midpoint of 2022.

The rate of increase was the softest in the current 16-month sequence, albeit still strong overall.

Meanwhile, temp billings saw the rate of increase decelerate steeply to only a modest pace.

Demand for permanent and temporary staff rose also rose at a slower pace, as growth in permanent vacancies was the softest for 15 months.

At the same time, the downturn in staff availability intensified for both permanent and temp workers.

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 permanent staff appointments across the Midlands increased further in June.

While strong overall, the latest expansion was the softest in the current 16-month sequence of rising placements.

Survey members often linked hiring to additional capacity requirements as demand increased, although some recruiters commented on a lack of suitably skilled candidates.

The uptick in permanent placements in the Midlands was the joint-fastest of the four monitored regions.

Temporary billings across the Midlands continued to rise at the end of the second quarter, though the rate of increase slowed sharply from May.

Despite rising consistently for two years, the latest increase was the softest in this period and only modest.

According to panellists, temporary staff were taken on amid difficulty in sourcing permanent staff, however there was evidence that firms were cutting back on temps due to increased cost burdens.

The Midlands saw temp billings rise at the softest pace of the four monitored English regions.

Recruiters across the Midlands signalled a reduction in the supply of permanent staff for the fifteenth consecutive month during June.

The reduction was commonly attributed to candidate shortages and hesitancy to change roles amid cost of living increases.

The pace of the decrease accelerated from May and was the quickest recorded for eight months.

The fall in the Midlands was the second-weakest of the monitored regions, ahead of the North of England.

The availability of temporary staff in the Midlands decreased further in June.

According to anecdotal evidence, some suitably skilled staff had taken on roles already, resulting in a lack of available contractors.

The reduction was the sixteenth in as many months and the steepest since February.

Kate Holt, people consulting partner at KPMG UK, said: “Although the Midlands saw a further increase in the number of permanent job placements in June - its sixteenth consecutive monthly rise - demand for temporary workers in the region slowed sharply, a sign that economic pressures may be beginning to impact employers ' confidence to grow.

“As more candidates become hesitant to change roles amid the spiralling rise in cost-of-living, employers in the region face the prospect of needing to offer greater financial incentives to retain talent, thereby exacerbating wage inflation.

“All this suggests that, after a sustained period of growth, the Midlands jobs market is becoming increasingly fragile. ”