Firms in the North are taking on more permanent workers

The hiring of permanent staff across the North of England has accelerated, new data reveals today, with strong sales attributed to the rise.

Chris Hearld, of KPMG. Picture Tony Johnson.

The number of permanent vacancies in the North continued to rise during October, faster than that seen in September and slightly quicker than the average across the UK.

Similarly, the number of available jobs for temporary workers rose further at the start of the fourth quarter. The pace of expansion was the quickest in 14 months and outpaced the UK average.

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Recruiters reported that greater demand for staff, particularly for industrial, construction and blue collar workers, boosted temp billings during October.

There was also an overall increase in temporary staff billings across the UK during October.

The marked expansion was the second-fastest seen so far this year as all four regions posted faster rates of growth compared to September.

The data was published in the KPMG and REC UK Report on Jobs: North of England and is compiled by IHS Markit.

However, the availability of permanent staff in the North of England continued to fall at the beginning of the final quarter, as it has done since February 2013.

Anecdotal evidence pointed to a number of skill shortages including those of accountants, drivers, engineers and lawyers. October data also signalled the sharpest fall in permanent candidate availability across the UK since January, extending the current run of decline to 66 months.

Chris Hearld, inset, Northern Regional chairman at KPMG UK, said: “Businesses in the North have been relentless in hiring new staff over the past few years and continue to do so, which points to a resilient and confident economy.

“But, as more job opportunities are created, the region is being hampered by chronic skills shortages – something that is proving to be a challenge for many of our clients.

“Competition for the best talent will be fierce and management teams will need to consider attracting recruits from beyond their local markets, which will also put upward pressure on wages.”

October’s data pointed to a further sharp increase in remuneration offered to newly-placed permanent workers. Recovering from September’s recent low, the rate of inflation accelerated to a four-month high in October.

Higher starting salaries were generally attributed to skill shortages and the need to attract staff. UK permanent starting salaries rose markedly at the start of the fourth quarter.

The pace of inflation was slightly slower than that seen during September, but elevated relative to the historical average. Salary growth was fastest in the South of England and slowest in London.

Neil Carberry, chief executive at the REC, said: “Skills shortages are a long-standing feature of our economy. They affect the ability of employers to grow and create jobs.

“That we have shortages in key skilled roles like IT, engineering and health is a sign that the right training and support is not in place for people to progress into these jobs from lower skilled work.

“While firms spend a lot every year on training, this mismatch persists. Renewed investment from firms must be partnered with openness from Government to doing things differently, starting with the reform the Apprenticeship Levy needs, turning it into a skills levy that supports all workers to have access to the training they need.”