Warning for firms amid first jobs fall in six years

Chris Hearld, Northern regional chairman at KPMG UK
Chris Hearld, Northern regional chairman at KPMG UK
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The North has seen the first decline in permanent job placements in over six years, according to KPMG’s latest report on jobs for the North of England.

Permanent staff placements fell in January for the first time in 77 months. The reduction was the first seen since August 2012, and the fastest for just over six-and-a-half years.

KPMG said recruitment agencies noted a hesitancy in hiring among their clients due to Brexit-related uncertainty.

Permanent staff appointments also fell at the national level at the start of 2019. Albeit only marginal, the decline was driven by contractions in three of the four monitored English regions. The South of England was the only area to record growth.

Chris Hearld, Northern regional chairman at KPMG UK, said: “Northern businesses might want to hire staff, but a chronic shortage of labour – particularly skilled workers – is now starting to bite. Not only will companies feel under resourced, they are also seeing wage and salary demands increase which will put more pressure on the bottom line.

“The message coming from the data is clear – the local business community needs to make sure that it continues to invest in creating, attracting and retaining talent if it to remain resilient and competitive.”

Recruitment & Employment Confederation chief executive Neil Carberry added: “This is the first month since July 2016 where permanent placement numbers have dropped, with weaker – but still positive – performance for temporary roles, and the lowest rate of vacancy growth for over two years.

“But we should be careful not to overreact – employment rates are high, and the performance of our labour market overall is still strong. We also know that key sectors such as accounting, engineering and IT are facing shortages.”

Mr Carberry said the survey results are a sharp reminder to politicians in Westminster and in Brussels of the need to provide businesses with clarity about the path ahead, so they can invest with confidence.

“In the public sector, the NHS continues to find it particularly difficult to find care workers and nurses – the effects of which are being felt by patients and overworked existing staff,” he said.

“Along with other sector shortages, this again emphasises the need for pragmatism on immigration and a clear post-Brexit transition period.”

The research showed that billings received from the employment of short-term workers in the North of England also fell for the first time in six-and-a-half years in January. Although recruitment consultancies reported only a marginal rate of decline overall, the result contrasted with a modest expansion across the UK as a whole.

The latest UK-wide increase was the softest since September 2015, with a reduction in the capital also weighing on the UK average. The Midlands posted the fastest rate of growth, outpacing the South of England.

January survey data pointed to softer increases in demand for both permanent and temporary workers in the North of England. Notably, permanent staff vacancies grew at the slowest rate for 29 months.

Despite registering a solid rise overall, growth of demand was softer than that seen at the national level. Short-term positions also rose at the weakest rate since August 2016, and at a pace that was slower than the UK average.

KPMG said the number of candidates available to fill permanent job positions in the North of England also fell in January.

Permanent staff supply has now contracted in each month for the past six years. The pace of decline quickened compared with December, registering the fastest fall since December 2017.

Recruitment consultancies said shortages were primarily for skilled workers.