Demand for staff in North rises sharply, according to KPMG and REC study

The latest KPMG and REC, UK Report on Jobs: North of England also found tentative signs of more candidates entering the jobs market.

Pay pressures also moderated slightly but remained historically elevated, according to the study.

The report is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.

A spokesman said: “Recruitment companies based in the North of England signalled a sixteenth successive monthly increase in permanent staff appointments across the region during May.

“Furthermore, the rate of increase was the fastest since February and outpaced that seen for the UK as a whole. Rising vacancies and activity levels at clients were noted as contributing factors.

“At the regional level, growth was led by London. The South of England recorded the softest increase in permanent placements, albeit one that was still solid.”

The statement added: “Latest survey data pointed to a further increase in billings received by recruiters from the employment of contract staff in the North of England. The expansion was sharp overall and the fastest for three months. Additionally, of the four monitored English regions, the North of England saw the quickest rise during May.”

According to survey respondents, there was a preference for hiring short-term staff among some companies.

Euan West, the office senior partner for Leeds at KPMG UK, said: “We continue to see an increase in vacancies across the North with growth here outpacing that seen across the UK as a whole.

“Increasing salaries to compete for candidates can only go so far so we are seeing businesses across the North looking at their wider employee value proposition to attract and retain staff; this includes extending the reach of existing flexible benefits packages, and improving the use of technology to allow employees to tailor their total reward in a way that suits them.”

A reluctance to switch roles, economic uncertainty and a shortage of quality candidates has also reportedly constrained permanent staff availability. Each of the four monitored English regions saw permanent staff supply fall in May, with the South of England recording the sharpest reduction.

There was a further decline in the supply of short-term workers during May.

Responding to the findings, Neil Carberry, chief executive of the REC, said: “These numbers show a hugely positive jobs market if you are looking for work.

“While the pace of growth has dropped after a stellar first quarter, by any normal measure there are still lots of vacancies out there, offering improved wages.

“For companies, they emphasise again that hiring is a challenge in this market, and getting it right matters – the help of professional recruiters will be vital.

“Demand for temporary workers is stabilising faster than for permanent staff, which could suggest a little caution creeping into employers’ thinking in the face of high inflation.

“But compared to pre-pandemic, labour supply is still the big issue we have to solve.

“With over half a million people missing from the jobs market, and demand still growing strongly, this is a big, strategic issue for the UK.

“Growth is essential to funding public services and paying higher wages sustainably.

“Any plan for growth must include action to help people into work from inactivity, skills reform, support for innovation on productivity and targeted immigration reform.”