Renewed drop in permanent staff placements following just one month of growth – survey

The upturn in permanent staff appointments across the Midlands seen in May was in fact brief with a renewed drop in the number of permanent staff placements signalled in June.

This is according to the latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global.

In contrast, billings for temporary staff picked up again in June and at the most pronounced rate for over two years.

Demand for permanent staff contracted again, following three successive months of growth and in turn supply increased rapidly and at an accelerated pace.

At the same time, growth of starting salaries across the Midlands picked up, while hourly pay inflation for temp staff cooled.

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.

Following a brief period of growth in May, recruiters in the Midlands indicated a renewed decline in the number of staff placed into permanent roles.

The drop in staff appointments reportedly reflected weak demand for permanent workers and subsequently a fall in the number of vacancies. That said, the rate of decline was only marginal overall.

Of all four monitored English regions, the Midlands posted the softest decrease in permanent placements in June.

June data revealed a third consecutive monthly rise in the number of billings for temporary staff across the Midlands. Recruitment consultancies linked the improvement to increased demand for temporary staff, with some stating a preference over permanent workers.

Regionally, the Midlands recorded the quickest rise in billings received for the employment of temporary staff.   

There was a fresh decline in the number of vacancies for permanent roles across the Midlands at the end of the quarter, the first decrease for four months. The contraction was the fastest since the start of 2021.

June data signalled a slowdown in vacancy growth for temporary staff across the Midlands. Though still moderate, the latest increase in demand for temp workers was the slowest for five months.

Average salaries awarded to newly placed staff in the Midlands increased in June, thereby stretching the current run of growth to 40 months. Though the respective seasonally adjusted index picked up to signal a sharp rise in starting salaries, inflation remained subdued compared to the historical trend.

Kate Holt (pictured), people consulting partner for KPMG in the Midlands said: “The Midlands job market presents a mixed picture.

“The decline in permanent staff placements is concerning, especially considering the simultaneous increase in staff availability. Businesses are becoming more cautious in their hiring decisions; however, this could lead to higher unemployment in the long term.

“The East Midlands is already showing the highest unemployment rate across all monitored regions in the UK at 5.6 per cent and the West Midlands is closely behind at 5.1 per cent.

“On a slightly more positive note, salaries are on the rise, albeit at a slower pace than in previous months. Overall, the report paints a picture of a job market in transition.”