Much weaker decrease in permanent placements in February – report

There was a much softer decline in permanent placements in the Midlands during the first quarter of 2025, according to a major jobs survey.

The latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global, says the reduction in new permanent joiners was the softest in eight months and only modest overall.

The report adds temp billings fell for the first time in just under a year, albeit only marginally.

Demand for staff remained weak during February, with both permanent and temporary vacancies declining sharply. In fact, the latter saw the steepest reduction since the initial wave of the Covid-19 pandemic in spring 2020.

On the pay front, both permanent salary and temp wage inflation eased on the month and remained well below their respective series averages.

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.

February data pointed to a further reduction in permanent placements in the Midlands, extending the current sequence of decline to nine months.

That said, the reduction was modest and the softest since last June. According to respondents, a lack of recruiter confidence and market uncertainty meant that companies were reluctant to hire.

The reduction in permanent placements in the Midlands was the slowest of the four monitored English regions.

For the first time since March 2024, temp billings fell in the Midlands midway through the first quarter. Where a decrease was reported, economic uncertainty and a focus on taking on permanent candidates were mentioned.

The Midlands saw the softest fall across the monitored English regions, with the sharpest decline in London.

Demand for both permanent and temporary workers declined during February, and to larger extents than was the case in January.

Permanent vacancies fell markedly, with the rate of contraction slightly stronger than in January. Only London posted a softer fall than that in the Midlands, however.

Demand for temps was down for the sixth successive month, and at the fastest pace since the opening wave of the COVID-19 pandemic in spring 2020.

As has been the case since March 2021, starting salaries for permanent workers in the Midlands rose in February. Panellists reported that the increase often reflected the offering of higher salaries in order to attract suitably skilled candidates.

The rate of inflation was solid, though the Midlands was one of only two regions to register permanent salary growth, together with London.

Hourly pay rates for temporary staff increased for the third consecutive month midway through the first quarter. The rate of wage inflation softened from January and was much weaker than the series average.

The increase in temporary pay rates in the Midlands was the sharpest of the English regions covered.

Kate Holt (pictured), people consulting partner at KPMG in the Midlands said: “While challenges to the nationwide job market show few signs of easing, here in the Midlands, the markedly softer decline in permanent placements during February could indicate that the worst is behind us. 

“Although a product of wider economic uncertainty, a decline in temporary billings also signals businesses are prioritising investment in hiring for permanent roles – something that will be received well by a growing number of candidates looking for permanent positions in the region.

“Midlands businesses still need to be on the front foot and invest in their teams, building long-term skills among their employees.”