Permanent staff placements expand at sharp pace

Recruitment consultants across the North of England indicated higher permanent staff placements in September. The rate of expansion was sharp, despite easing from August’s record high. As has been the case since June, all four English regions monitored by the survey registered growth of permanent staff placements during the latest month. The rates of expansion were sharp across all regions, with the North recording the strongest rise for the third consecutive month.

September data indicated that temporary/contract staff billings in the North rose for the fourteenth month running. The overall rate of expansion was robust, albeit the slowest since June. In line with the trend for permanent staff placements, temp billings increased in all four regions. The quickest expansion was seen in the Midlands, followed by London. Temporary/contract staff billings at the UK level rose at a sharp, albeit slower, pace.

The growth rate for permanent staff demand across the North rose to the highest since July 1998. Demand for temp workers rose at a slightly slower pace in September, but was still the second-fastest in over nine years. The rates of expansion both surpassed those seen at the UK level.

Solid decline in availability of permanent workers

Permanent candidate numbers in the North fell for the eighth consecutive month in September. The overall rate of contraction was solid, but eased slightly since August. Latest data indicated that permanent candidate supply also fell in the remaining English regions, with the sharpest decline seen in London. At the national level, the availability of permanent workers contracted at a solid pace.

Contract candidate numbers in the North were broadly unchanged in September. This was indicated by the seasonally adjusted index posting close to the no-change mark of 50.0. Recruitment consultants signalled lower temp availability in London, the Midlands and the South. Subsequently, temp supply at the UK level fell for the third consecutive month, with the rate of contraction in September being moderate.

Rate of salary inflation strongest since February 2008

Salaries paid to newly-appointed permanent staff in the North increased for the nineteenth successive month in August. Moreover, the rate of salary inflation accelerated to the fastest since February 2008 and was in line with that seen across the UK as a whole. Permanent salaries rose in the three remaining regions during September, with the rate of salary growth again strongest in the South.

Temp rates in the North rose at the fastest pace in seven months. Temp hourly pay rates also rose in the other English regions, with the Midlands registering the strongest increase for the second successive month. The rate of wage growth at the UK level was sharp and faster than in August.


Chris Hearld, KPMG’s Leeds office senior partner, comments:

“With the Bank of England arguing last week that economic recovery will only be sustainable over the long term if regions beyond London grow strongly, it is heartening to see the North showing yet more sharp growth in the number of permanent placements. Improving market conditions, higher activity levels amongst clients and generally stronger levels of confidence amongst employers are certainly some of the major factors underpinning this latest rise.

“Yet it remains worrying that employees are clearly still not sharing employers’ growing faith in recovery. Demand for staff may be up, but the number of individuals putting themselves on the market has dropped for the eighth consecutive month. Perhaps pay has to rise to encourage staff to ‘make the move’. If it doesn’t, we could be about to witness a growing gap between what employers need and what employees are prepared to do.”

REC chief executive Kevin Green says:

“This month’s figures show the jobs market continues to be the success story in the UK economy with all regions and sectors experiencing growth. Recruiters tell us that the number of people being placed into permanent roles has now been growing and temp growth maintains its strength.

“This is good news but behind this success story we can see that the division in the jobs market is getting worse with vacancies going up as the number of skilled workers to fill them goes down. There is a real two speed labour market in place. We have a buoyant, candidate driven market for skilled and professional roles, versus an oversupply of candidates for jobs that don’t rely on a specific skill set.”