Permanent staff hiring across the North of England continued to weaken at the start of the fourth quarter, according to the latest KPMG and REC, UK Report on Jobs: North of England survey. Meanwhile, billings received for short-term workers rose fractionally across the region.
With demand for staff declining further in October, recruiters recorded further drops in pay. In fact, starting salaries for permanent staff decreased at the most marked pace in just over five years. At the same time, temp rates of pay fell only slightly.
The KPMG and REC, UK Report on Jobs: North of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.
Decline in permanent placements picks up pace in October
The seasonally adjusted Permanent Placements Index posted below the crucial 50.0 mark in October, to signal a further decrease in permanent staff appointments across the North of England. The pace of contraction, although sharp and stronger than in September, was below the average seen in 2025 so far.
Recruiters noted that demand for permanent staff was subdued due to elevated employment costs as well as hiring hesitancy amongst employers amid economic uncertainty. The North of England recorded the steepest drop in permanent placements of all four monitored English regions.
October survey data pointed to a second successive monthly rise in billings received for temporary staff across the North of England. However, with the respective seasonally adjusted index just fractionally above the crucial 50.0 mark, the rate of expansion was only slight.
On one hand, recruiters noted more stable demand for temp staff, but on the other, slow decision-making and generally quiet market conditions had reportedly dampened growth. The North of England was one of two English regions to record a rise in temp billings, though the uplift in the Midlands was solid overall.
Permanent job openings across the North of England fell again in October, stretching the current sequence of decline to exactly one year. The rate of contraction was little-changed from September and solid overall. Demand for temporary workers also fell across the region for the twelfth consecutive month. The pace of decline was marked and the fastest since January.
While permanent vacancies across the North of England declined at a weaker pace than that seen nationally, the drop in temporary staff demand in the region was broadly in line with the UK-wide trend.
Softest rise in permanent staff availability in four months
The supply of permanent labour across the North of England continued to increase in October, thereby stretching the growth trend seen since the start of 2024. Qualitative data collected by the survey indicated that candidate numbers rose due to redundancies and mismatches between workers’ skills and job opportunities. Although substantial and slightly quicker than the UK average, the rate of expansion eased to a four-month low in October.
October survey data pointed to a further increase in temporary labour supply across the North of England. The seasonally adjusted Temporary Staff Availability Index slipped to a four-month low, but was nevertheless consistent with rapid growth. In anecdotal evidence, panellists linked the increase in supply to a combination of hiring freezes and redundancies. The rate of improvement in the North of England was the least pronounced of the four monitored English regions.
Sharpest fall in starting salaries in just over five years
The seasonally adjusted Permanent Salaries Index posted below the crucial 50.0 mark for the third month in a row in October, to signal a further reduction in starting salaries across the North of England. Though moderate, the rate of reduction was the steepest seen in just over five years.
In contrast, permanent pay fell only fractionally in the South of England, and rose modestly in the Midlands and London. The decrease reflected elevated labour costs, linked to the recent increase in National Insurance contributions, panellists reported.
For the fourth time in five months, recruiters based in the North of England signalled a decline in average hourly rates of pay for temp staff in October. The rate of reduction was only marginal, however, with the respective seasonally adjusted index posting just below the 50.0 no-change mark. Meanwhile, temp wages were broadly stagnant at the UK level, following a one-year period of growth.
Commenting on the latest survey results, Phil Murden, Leeds office senior partner at KPMG UK, said: “The North’s jobs market faced deepening pressure in October, with the combined effect of rising employment costs and financial uncertainty ahead of the Autumn Budget. Against this backdrop, permanent placements declined more sharply and we’ve seen the steepest fall in starting salaries in over five years.
“There is some positivity here though. Temporary billings have grown for a second consecutive month, showing that employers are finding flexible solutions for current conditions. Also with robust candidate availability, businesses that move boldly have real opportunities to strengthen their teams with quality talent at more competitive rates thanks to a moderate drop in starting salaries for both permanent and temp workers.”
Neil Carberry, REC chief executive, said: “Today’s data reflects the more positive outlook we have been hearing from recruiters since the start of the autumn. They aren’t exuberant – this is just a more stable market.
“With a second successive monthly rise in billings received for temporary staff across the North of England, we can hope that the long period of retrenchment we saw last into the summer, is starting to ebb away. But we have been here before – there was a similar mood in the UK jobs market before the Chancellor’s Halloween Budget last year.
“The huge surprise increase in payroll taxes then shocked the market and we have seen the results of that, as businesses predicted then, in higher unemployment and redundancy. As we go into Budget 2025, there can be no repeat. If Government cares about growth, as it claims, measures must stoke business investment, not deter it.
“The report today is the best we have seen in the UK since the summer of 2024. There is a broader base of demand forming in the North of England, from accounting and finance to logistics and logistics roles. The Budget must give employers confidence to invest, with a focus on unlocking potential through delivering on skills reform, supporting business investment and reforming the approach to the Employment Rights Bill, which needs a dose of practicality and realism.”
