Permanent placements fall at fastest pace in seven months – report

The latest KPMG and REC UK Report on Jobs survey signalled the sharpest fall in permanent placements since the start of 2024 during August, while temp billings continued to increase and at a steeper rate than that seen in July.

Demand for permanent staff continued to fall in August, extending the sequence of decline to three months.

Concurrently, recruiters suggested that redundancies had contributed to additional candidates being available to work, as indicated by a sustained increase in both permanent and temporary staff supply.

On the pay front, permanent salary inflation remained solid but well below the long-run series average. Temp pay meanwhile rose only marginally and at the softest rate since January 2021.

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.

August data signalled a further decline in the number of permanent placements made by recruitment agencies in the Midlands.

Staff appointments were reportedly curtailed by hesitancy among firms to hire and falling vacancies. The pace of contraction was strong and the most marked seen since the start of 2024.

At the UK level, the Midlands saw the second-sharpest drop in permanent placements, ahead of the South of England.

Temp billings across the Midlands saw growth for the fifth consecutive month midway through the third quarter. The rise in temporary staff placements contrasted with the UK average which signalled a marginal decrease. Panellists noted that the increase was due to wider advertising for temporary roles.

Permanent vacancies in the Midlands decreased for the third month in a row during August. Of the four monitored English regions, the Midlands saw the second-sharpest reduction in demand for permanent staff, despite the overall rate of decline being marginal overall.

With regards to temporary vacancies, the Midlands posted a broadly stable picture in August. Moreover, the fractional expansion was the weakest in the current 46-month sequence of rising demand.

The supply of permanent staff rose again in August, thereby extending the current sequence of increasing candidate numbers to 17 months.

Temporary candidate availability in the Midlands increased for the sixteenth successive month in August.

Permanent starting salaries in the Midlands increased again in August, thereby extending the current sequence of inflation that began in March 2021. The rate of salary inflation quickened slightly from the previous survey period and was solid overall.

Midlands recruitment firms registered a slower increase in temp pay rates midway through the third quarter.

Commenting on the latest survey results, Kate Holt (pictured), people consulting partner at KPMG in the Midlands said: “The period of market uncertainty may last longer than expected. August is typically a quiet period for recruitment however several factors such as pockets of redundancies and less instances of attrition has meant that less businesses are in the market for new talent.

“Both employers and job seekers are likely to continue facing a challenging period that will require careful long-term planning and adaptability.”