Permanent placements fall at slowest pace in five months - report

The latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global, signalled the slowest fall in permanent placements in the Midlands in five months in April, as temp billings returned to growth following a solid decrease in March.

Demand for both permanent and temporary staff grew further in April, and at the fastest paces across the English regions. Greater demand for permanent employees was met by a slower rise in their availability, however. The upturn in the supply of permanent staff was marked, nonetheless, as temporary worker availability also increased at a strong rate. In turn, wage inflation across the Midlands picked up as both permanent starting salaries and temp hourly pay rose at sharper paces.

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.

April 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 due to challenging economic conditions.

That said, the pace of contraction eased to the slowest in the current five-month sequence of decrease, and was only slight overall.

At the UK level, the Midlands saw the weakest drop in permanent placements.

Temp billings across the Midlands returned to growth at the start of the second quarter, following a solid fall in March. The rise in temporary staff placements contrasted with the UK average which signalled a solid decrease. Panellists noted that the increase was due to a shift away from permanent hires at some firms amid economic uncertainty.

In contrast to the trend seen across the UK as a whole, permanent vacancies in the Midlands increased in April. Of the four monitored English regions, the Midlands saw the greatest uptick in demand for permanent staff, despite the rate of growth easing from March.

With regards to temporary vacancies, the Midlands saw the fastest rise of the English regions. Moreover, the increase was the second-fastest seen in the region since last July.

The supply of permanent staff rose further in April, thereby extending the current sequence of growth to 13 months. The pace of growth slowed from March but remained sharp overall. Of the four monitored regions, the Midlands saw the slowest rise, however. Anecdotal evidence suggested that redundancies in the market boosted the supply of candidates.

Temporary candidate availability in the Midlands increased for the twelfth successive month in April. The rate of growth in candidate supply picked up from March to a strong rate. Panellists stated that redundancies had led to increased availability of staff. The pace of the upturn was, however, slower than the UK average for the second successive month.

Permanent starting salaries in the Midlands increased again in April, thereby extending the current sequence of inflation that began in March 2021. The rate of salary inflation accelerated for the second month running to the fastest since December 2023. The rise in salaries for permanent new joiners was linked to an uptick in demand for candidates.

The pace of salary inflation was the quickest of the four monitored regions.

Midlands recruitment firms registered a faster increase in temp pay rates for those placed at the start of the second quarter. The pace of wage inflation picked up to the quickest in four months and was steep overall. Survey respondents noted that greater temp wage rates were due to some additional cost-of-living payments and demand for temporary workers.

The rate of temp wage inflation was broadly in line with the UK average.

Kate Holt (pictured), People Consulting partner for KPMG in the Midlands said: “Of note this month is the uptick in both permanent and temporary vacancies in the Midlands, outperforming the other three monitored English regions.

“This suggests that there are green shoots in the region’s job market, particularly for candidates in more technical industries like Engineering or IT.”