Job Market Report South: Oct 19

Every month we gather the key figures from IHS Markit, KPMG & REC Job Market Report – the regular update from recruitment consultancies in the area. We’ve got the key information you need to know about recruitment in the south and what happened in October.

Joint-weakest rise in demand for permanent staff in over a decade

KEY FINDINGS

• Marked reduction in permanent placements
• Continued declines in candidate numbers
• Growth in demand for staff slows

Commenting on the latest survey results, Ian Brokenshire, Senior Partner at KPMG Plymouth, said

“Businesses in the South West are still playing the waiting game. Until there’s a clear Brexit outcome insight, we’re seeing continued caution around hiring in the region. “For businesses who are feeling brave enough to recruit, they’re facing a decreasing talent pool with many would-be job seekers taking the view that now is not the right time to look for a new role.
As a result, those who are job hunting can take advantage of the supply vs demand issue to command higher pay, and businesses are feeling the pinch as a result.”

Neil Carberry, Recruitment & Employment Confederation chief executive, said:

“These figures underline why this needs to be a jobs election. The labour market is strong, but permanent placements have now dropped for eight months in a row, and vacancies growth in the South has fallen to its lowest level for a decade. One bright spark is the temporary labour market, which continues to provide flexible work to people and businesses that need it during troubled times.

“Ending political uncertainty and getting companies hiring again is vital – but we must also look to the long term future of work. Jobs must be front and centre during this election campaign, and we will be launching our REC manifesto for work next week. We will be urging all political parties to run on policies which support and enhance the UK’s flexible labour market – allowing businesses to create jobs, employees to build careers and the economy to grow.”

RECRUITMENT IN THE SOUTH – OCT 19 SUMMARY

STAFF APPOINTMENTS

Sharp fall in permanent placements
Recruitment consultancies in the South of England saw permanent placements decline for the eighth month running in October. Moreover, the rate of contraction was sharp, having accelerated to the fastest in four months. Respondents indicated that Brexit uncertainty had led to slower decision making, while a lack of candidates had also contributed to the fall. The reduction in permanent placements in the South was sharper than the UK average.

Temp billings fall for first time in seven months

Recruiters signalled a drop in billings from the employment of temporary staff in October, thereby ending a six-month sequence of expansion. That said, the fall was only slight. Panellists often reported that contracts had come to an end, and had not been extended or replaced. The fall in temp billings in the South of England contrasted with a rise across the UK as a whole.

JOB VACANCIES

Slight increases in demand for both permanent and temporary workers were registered in October. The increase in permanent vacancies was the joint-weakest in just over a decade of continuous expansion. Meanwhile, the rise in demand for temps was the joint-slowest since June 2012, equal with that seen in August.
In both cases, vacancies in the South of England increased at a weaker pace than across the UK as a whole.

STAFF AVAILABILITY

Sharper fall in permanent candidate numbers
October data pointed to another steep monthly reduction in permanent candidate numbers in the South of England. Moreover, the rate of decline accelerated to the fastest in four months. According to respondents, uncertainty around Brexit had resulted in caution among employees, and a reluctance to move roles until the situation becomes clearer. More than 36% of panellists noted a fall in permanent candidate numbers, against 13% that posted a rise.

Solid fall in temp candidates
Short-term staff supply continued to fall in the South of England during October, continuing the trend which began in September 2013. The pace of reduction was solid, but slower than that seen in the previous month. As was the case with permanent candidates, respondents indicated that temporary workers were reluctant to move from current roles amid ongoing uncertainty. The fall in temp candidate supply in the South was marginally quicker than the UK average.

DEMAND FOR SKILLS

Skills in short supply: Permanent staff

• Accounting/Financial: Accountants Auditors Book Keepers Estimators Finance Financial
• Advisors Taxation Wealth Advisors
• Blue Collar: Forklift Drivers Industrial Mechanical Production Warehouse
• Construction: Construction Sales Quantity Surveyors
• Engineering: Electrical Engineers Technicians
• Executive/Professional: Law, Marketing, Marketing Executives, Media
• Hotel/Catering: Catering, Chefs, Hospitality
• IT/Computing: CAD Designers, Data Analysts, Developers, Full Stack Developers, IT
• Software Technical: Technical Sales, Technology
• Nursing/Medical/Care: Chemists, Nurses
• Secretarial/Clerical: Administration, Office Staff, Reception
• Other: Analysts, B2B, Call Centre, Ecologists, Sales, Skilled

Skills in short supply: Temporary staff

• Accounting/Financial: Accountants Finance
• Blue Collar: 7.5T  Drivers, Drivers, Forklift Drivers, Industrials, LGV 1, LGV 2, Production, Warehouse, Welders
• Construction: Estimators, Surveyors
• Engineering: Engineers
• Executive/Professional: Marketing, Recruitment, Team Leaders
• Hotel/Catering: Catering Chefs, Front of House, Hospitality
• IT/Computing: Technology
• Nursing/Medical/Care: Nurses, Support Workers
• Secretarial/Clerical: Administration, Office Staff, Payroll
• Other: Call Centre, Telesales

PAY PRESSURES

Starting salary inflation at three-month high

Shortages of candidates meant that companies offered higher starting salaries for permanent placements to try and attract candidates. As a result, salaries rose sharply again in October, with the rate of inflation quickening to a three month high. The rise in permanent starting pay in the South of England was the fastest of the four English regions covered by the survey.

Temp wage growth picks up

October data pointed to a sharp monthly increase in wages for temporary workers in the South of England. Moreover, the rate of inflation quickened from that seen in September and was the sharpest of the four English regions. Anecdotal evidence suggested that pay rates had been raised in line with a shortage of candidates. Close to 16% of panellists reported a rise in temp wages, against 2% that posted a fall.

OFFICIAL DATA: UK AVERAGE WEEKLY EARNINGS

Data from the Office for National Statistics showed that average weekly earnings across the UK rose 3.4% on an annual basis to £640 in the second quarter of 2019. Wales saw the strongest increase in earnings during the second quarter, posting a 9.2% rise to £576. The North East was the only region to note reduced pay compared to the previous year, with earnings down -2.3% to £537.

REGIONAL COMPARISON of Recruitment in the South

Staff appointments
Permanent staff appointments fell across the UK for an eighth consecutive month in October. Moreover, the rate of reduction was the second-quickest since July 2016 and solid overall. The decline was driven by decreases in three of the four monitored English regions, with only the North of England recording an increase. The fastest rate of contraction was recorded in the Midlands, followed by the South of England. Meanwhile, temp billings rose across the UK at the start of the fourth quarter, as has been the case in every month since May 2013. The increase lost momentum from September, however, and was only marginal overall. At the regional level, upturns were reported in the Midlands and the North of England, but reductions were seen in London and the South of England.

Candidate availability
October survey data pointed to another decline in the supply of permanent staff at the UK level, extending the current sequence of deteriorating availability to six-and-a-half years. The fall was marked overall and the quickest since June, driven by reductions across all four of the monitored English regions. The steepest rate of contraction was seen in the South of England. In line with the trend for permanent staff, temporary candidate availability also deteriorated further in October. That said, the pace of decline eased from September and was among the slowest in the current sequence of falling candidate numbers which began in July 2013. The reduction was broad-based across all four monitored English regions, with the Midlands noting the quickest deterioration in temp labour supply overall.

Pay Pressures
Starting salaries for permanent staff across the UK increased in October, stretching the current sequence of salary inflation which began in May 2012. The rate of increase softened from September, but remained elevated in the context of historical data. All four of the monitored English regions reported an increase in permanent starting pay. The South of England recorded the quickest rate of inflation, whilst the North of England noted the softest increase in permanent salaries.

Meanwhile, temporary pay across the UK increased further in October, with the rate of pay growth accelerating from September. That said, the rise was the second-slowest since March 2017. The South of England reported the fastest rate of increase of all four monitored English regions, whilst the rate of wage inflation was weakest in the North of England.

Source: Thanks as always to KPMG, REC and IHS Markit for the report

More Dovetail Blogs re. recruitment in the south

Job Market Report – September 2019
Why NOW is the time to recruit
Recruitment specialists don’t always hit the mark

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Written by Laura Miller