Temp staff availability continues to fall in Midlands – KPMG and REC Report on Jobs

The availability of temporary staff in the Midlands has continued to fall in the midlands last month (November) as jobseekers looked for greater stability.

This is according to the most recent UK Report on Jobs from KPMG and REC, which also reported an increase in permanent placements after a month of decline. Wages in the region have increased in the past month, but at the softest pace recorded in the past year and a half.

The report, compiled by S&P Global from the responses of approximately 100 recruitment and employment consultancies in the region, found the seasonally adjusted Permanent Placements Index moved back above the 50.0 no-change mark in November, meaning permanent staff appointments increased across the region.

The overall rate, however, was still below the rates recorded over much of the past 18 months, with some respondents noting that economic uncertainty was impacting hiring decisions. The Midlands was also the only monitored English region to report an upturn in permanent placements, with the other three, led by London, all experiencing reductions.

Economic uncertainty is also taking its toll on temp billings, with them decreasing in November for the third month running, The pace of decline was the weakest in the current sequence, however. Vacancy growth also slowed last month.

On the other side of the coin, the availability of permanent staff increased last month for the first time since March 2021, even if only slightly. This is not necessarily positive, however, with redundancies cited as a contributing factor, along with candidates seeking higher salaries.

The negative trend in temporary staff availability which has been observable since March 2021 continued last month, with respondents pointing to increasing number of candidates who seek more stability in permanent placements. The decline was less than in October, however, and the slowest in the past 20 months.

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The report also states that salaries awarded to new permanent hires in the region rose once again, although the pace of inflation was the second-softest of the past year-and-a-half, with general inflation and shortages in skilled labour driving increases. The Midlands, which recorded the sharpest increase, was also the only English region to report a month-to-month increase in the rate of inflation.

Kate Holt, People Consulting Partner at KPMG UK, said: “Of particular note this month is the rise in permanent placements and starters’ salaries in the Midlands, in sharp contrast to the other three monitored English regions.

“This reflects the combined effects of employers recognising that the state of the economy has increased candidate need for job security and additional benefits. However, we expect wage growth to start trending down in the months ahead as businesses start to focus on other factors.

“Employers who are able to offer existing workers and candidates opportunities to upskill and reskill, rather than focusing solely on core pay, may well benefit most in this tight jobs market.”

Neil Carberry, Chief Executive of the REC, said: “This month’s data emphasises that while employers are moderately more cautious in the face of economic uncertainty, this is not yet a major slowdown in hiring. While permanent recruitment activity in the Midlands bucked the wider trend and increased, the rate of growth has slowed.

“In contrast to the national trend, permanent staff availability increased for the first time since 2021 in the Midlands. From discussions with REC members, this is primarily the result of redundancies and candidates looking to move for higher salaries.

“As the economic outlook weakens, we can expect to see falls from historic highs across our measures, but it is notable that pay and vacancies are still growing, although at a much lower rate.

“A flatter period in the labour market is inevitable in this current economic climate, but demand is being supported by some major underlying factors, including labour shortages and technological change.

“The main way to boost performance is to unlock growth by businesses putting their people planning first, as a strategic way to enhance productivity. Government can help through skills and immigration reform. Boosting growth is the only way to ensure a prosperous country for all of us.”

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