North bucks national trends in recruitment market

The North of England was only region to see an upturn in permanent recruitment in February, according to the latest Report On Jobs survey by the Recruitment and Employment Confederation (REC).

Data from the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, showed continued hesitancy on hiring nationwide, with permanent placements made by recruitment agencies falling for the fifth straight month. The North of England was only region to buck this trend; it also saw the steepest increase in billings for temporary staff.

Despite the fall in new starts with businesses, recruiters reported that vacancies in both the public and private sectors continued to grow across all sectors monitored by the REC survey, with Nursing/Medical/Care topping the rankings in February.

Alongside economic uncertainty, the recruitment industry also continued to point to candidate shortages for driving the slowdown in hiring activity. While the latest monthly drop in labour supply was the softest seen for nearly two years, questionnaire responses from over 400 recruitment agencies nationwide highlighted that recent redundancies had played a role in improving supply of workers. The current economic climate was also making people more reluctant to seek out or consider new roles, despite candidate shortages also driving up salary offers.

Kate Shoesmith, REC Deputy Chief Executive, commented:

“As hirers work out what variable economic forecasts might mean for their business and staff, it makes sense that we continue to see temp billings hold up so well. Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers – even when the economic outlook is unclear. Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay. It will be particularly important to watch for any early trends coming from this data on regional disparities in supply and demand in the labour market.

“What this latest Report on Jobs shows is serious labour and skills shortages are not behind us. The economy stands to lose up to £39 billion in GDP every year from 2024 unless business and government act now. Many businesses are doing what they can but the Spring Budget is the ideal opportunity to find a way forward together. The Chancellor must put people issues first, with innovative and refreshed policies on skills and tackling economic inactivity, and from immigration to childcare.”

Claire Warnes, Partner, Skills and Productivity at KPMG UK, added:

“The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires, while permanent appointments fall for the fifth month in a row.

“Despite the rate of vacancy growth picking up to the best recorded in four months, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. Nursing, care and medical topped the rankings once again with highest demand for workers – both temporary and permanent.

“These factors combined continue to play into pay inflation as employers try to compete with the rising cost of living.

“What the economy needs now more than ever is a skilled workforce.”