Growth of permanent staff placements reaches survey record in August

August data highlighted a sharp and accelerated increase in permanent staff placements across the North of England, with the seasonally adjusted Permanent Staff Placements Index rising to its highest level in the survey history. For the third consecutive month, all four English regions monitored by the survey recorded higher permanent staff placements. August data highlighted the strongest rise in the North, followed by the South, the Midlands and London respectively. At the UK level, permanent staff appointments expanded sharply.

Temporary/contract staff billings in the North rose at the sharpest pace in nine-and-half years during August, with over 50% of panellists indicating higher temp billings. Growth of temp billings also accelerated in two other surveyed regions, the exception being the South. Subsequently, temp billings at the national level expanded at the sharpest rate in 15 years.

The pace of expansion in demand for permanent workers across the North accelerated to the fastest in over 15 years, while growth of demand for temp staff reached a nine-year high. At the UK level, the rate of increase in demand for permanent workers accelerated to the quickest in over six years and growth of demand for temp staff was the strongest since December 2000.

Permanent candidate numbers fall for seventh successive month

The availability of staff for permanent positions in the North decreased for the seventh month running in August. Despite being solid, the rate of contraction eased to the weakest since April. The supply of candidates for permanent positions decreased in three other regions monitored by the survey and was most pronounced in the Midlands. Permanent staff availability across the UK as a whole fell at a robust, but slower pace.

After adjusting for seasonal factors, temporary/contract staff supply across the North of England rose for the first time in three months during August. The rate of growth was, however, only marginal. Temp availability contracted in both London and the Midlands, while the South posted growth. At the UK level, the availability of temporary/contract staff fell for the second month running and at the strongest rate in six years.

Rates of wage inflation in the North ease

Recruitment consultants in the North of England reported higher salaries paid to newly appointed permanent staff in August. The rate of salary inflation was solid, but the weakest since January. Regional data pointed to higher permanent salaries in three other English regions, with the strongest rise seen in the South. Salary growth at the national level picked up pace and reached a five-and-a-half year high.

Similar to the trend seen for permanent salaries, temp rates in the North rose at a weaker pace in August, as indicated by the seasonally adjusted Temporary/Contract Pay Rates Index falling since July. Average temp hourly pay rates increased in all four regions, with the Midlands leading the rise in August. The rate of wage growth at the UK level remained robust, but eased from July’s five-and-a-half year peak.

Comments:

Chris Hearld, KPMG’s Yorkshire senior partner, comments:

“Confidence amongst employers is gaining momentum, more so in the North than anywhere else in the UK, with permanent appointments growing at the fastest rate in the report’s 15 year history.

“The demand for staff is good news for prospective employees. In the current marketplace, organisations seem increasingly willing to pay more for top talent, with the latest pay figures continuing to rise. The rate of wage inflation though is lower in this region than the national average suggesting that, confident or not, employers on our doorstep are keen to pay the right price for the right person rather than simply racing to fill a vacancy.”

REC chief executive Kevin Green says:

“August was an extraordinary month for the jobs market, with temp placements hitting a nine and a half year high. There is more good news for all workers with pay rates for temps rising and starting salaries for permanent staff also increasing.

“Vacancies have hit a high and fluidity is returning to the jobs market, so over the coming months we expect to see a noticeable improvement in official employment figures. The major issue now is the worrying lack of candidates to fill the jobs being advertised.

He added: “This month’s figures should be celebrated and efforts should be focused on addressing the skills gap rather than picking holes in flexible working.”