Rising demand for permanent staff adds to hopes of recovery

The Report on Jobs: North of England, which is compiled by KPMG, Markit and the Recruitment and Employment Confederation, suggests that some firms are finding it harder to hire the right staff, as competition to attract high quality workers intensifies.

According to the study, permanent staff placements in the North of England increased sharply in July.

More than 54 per cent of recruitment consultants, who were quizzed as part of the survey, said that a higher number of staff had been placed in permanent positions. The rate of expansion was the second-fastest recorded, since the survey started in October 1997. All four monitored English regions registered higher permanent staff placements in July.

The fastest increase was recorded in the North, followed by the Midlands, the South and London respectively.

Permanent staff appointments across the UK as a whole rose sharply, and at the quickest rate in 40 months.

The July data revealed the quickest expansion in temporary and contract staff placements across the North in nine years.

Temporary placements also increased in the three other surveyed regions. The rates of growth were all sharp, with the South and the North sharing the fastest expansion. At the UK level, temporary placements grew at the fastest pace since February 2011.

Demand for permanent workers in the North of England rose sharply during July, and at the fastest pace since January.

However, the number of candidates for permanent jobs across the North of England fell for the sixth month running in July, and at the quickest pace in more than eight years.

Permanent staff supply fell sharply across the South and London, while a moderate decline was recorded in the Midlands. At the national level, permanent staff availability contracted at the quickest pace since November 2007.

Regional variations were seen with regards to the availability of temporary staff.

The supply of temporary and contract staff in the North of England fell sharply in July, and at the strongest rate since April 2005. The supply of temporary workers fell in the South, stagnated in the Midlands and rose in London.

July’s data also pointed to a further increase in staff on permanent salaries across the North of England. Despite easing to a three-month low, the rate of salary inflation remained “sharp” overall, according to the study.

Permanent salaries increased across all four English regions during July. The sharpest rise was in the South, followed by the North, London and then the Midlands. Across the UK, the rate of salary inflation was at a 26-month high.

Chris Hearld, KPMG’s Leeds office senior partner, said yesterday: “Continued rising demand for permanent and temporary workers in the North of England provides further evidence of the region’s economic recovery, and the appetite of the business community to capitalise on growth opportunities domestically and abroad.

“While the sustained increase in permanent staff placements and temporary worker billings is depleting the North’s pool of available talent, the competition to recruit has intensified.

“This will be welcome news for people across the region, because the resulting boost to salary and wage inflation, which has been subdued during the downturn, helps to offset the pressures of escalating living costs.”

REC chief executive Kevin Green added: “The jobs market continues to skyrocket, with permanent employment and temporary placements increasing.

“A combination of confidence returning to the UK economy, and higher employer demand have contributed to this impressive set of figures.

“Starting salaries accelerated in July, and this is an early indicator of increased competition for candidates and skills shortages in a growing number of sectors.

“In addition to this, hourly rates for temporary workers increased.

“We anticipate starting salaries increasing over the coming months, as the economy strengthens and competition to secure talent hots up.”

Compiling the data

The Report on Jobs: North is based on data compiled from monthly replies to questionnaires, which are sent to around 100 recruitment and employment consultancies across the North East, North West and Yorkshire and the Humber.

Monthly survey data was first collected in October 1997. The data is collected at the end of each month.

All index numbers are calculated from the percentages of respondents reporting an improvement, no change or a decline.