The latest KPMG and REC, UK Report on Jobs: North of England survey indicated that the decline in permanent staff hiring eased in September. Although sharp, the latest reduction in permanent placements was the least pronounced in five months and slightly softer than the UK-wide trend. Meanwhile, temporary billings rose for the first time in nearly a year.
Demand for staff continued to fall across the region, particularly for permanent workers. At the same time, increases in candidate availability slowed since August but remained marked. Pay trends were subdued, with both starting salaries and temp pay falling for the second month in a row.
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 staff appointments loses momentum
The seasonally adjusted Permanent Placements Index posted below the crucial 50.0 mark again in September, signalling a further decline in permanent staff appointment across the North of England. Although sharp, the rate of contraction was the least marked since April. It was also slightly softer than the national average.
Recruitment consultancies often commented on a general slowdown in recruitment activity, linked in turn to economic uncertainty, fewer vacancies, and employer budget constraints.
There was a renewed rise in billings received from the employment of temporary staff across the North of England in September, as signalled by the respective seasonally adjusted index posting above 50.0 for the first time in nearly one year.
Although it was consistent with only a marginal uptick in billings, the increase contrasted with a solid reduction at the UK level, driven by marked declines in London and the South of England. Where recruiters signalled a rise in temp billings, this was often attributed to client requirements and a preference for contract staff.
Both permanent and temporary job vacancies continued to fall across the North of England in September. Demand for permanent workers declined at a solid pace that was slightly faster than in August, while demand for short-term staff fell at a modest pace that was the softest in three months.
Permanent job opportunities fell across all four monitored English regions, with the North of England recording the softest decline overall. Temp vacancies fell at a solid rate at the national level, and one that exceeded that seen in the North of England.
Permanent staff supply expands at slower, but still rapid pace
As has been the case since the start of 2024, permanent staff availability across the North of England increased in September. Although the rate of expansion slowed notably since August, it was the second-sharpest seen since December 2020 and rapid overall. It was also among the second-fastest of the four monitored English regions, just behind the South of England. According to anecdotal evidence, the uplift in supply was generally driven by redundancies.
September data signalled a further rise in temporary staff availability across the North of England, thereby stretching the current run of growth to just over two-and-a-half years. The rate at which the pool of temporary workers expanded was less pronounced than in the previous month, but sharp overall and in line with the national average. Recruiters noted a general rise in the number of job seekers amid a slowdown in demand for staff.
Starting salaries fall for the second month in a row
Starting salaries awarded to new permanent joiners in the North of England fell for the second month running in September. Tighter recruitment budgets, which in turn were linked to higher payroll costs, had reportedly influenced decisions on pay.
Although the rate of decline was slower than in August, it was in stark contrast to the long-run trend of strong growth. The South of England was the only other monitored English region to register a drop in starting salaries, with the rate of decline slightly quicker than that seen in the North.
Recruiters based in the North of England signalled a decrease in wages for short-term workers for the third time in the past four months in September. The rate of reduction was the fastest seen since June, albeit modest overall. Nevertheless, the decline in the North of England compared with a slight increase in temp pay across the UK as a whole, which was driven by upturns in the Midlands and London.
Phil Murden, Leeds office senior partner at KPMG UK, said: “Although hiring activity continues to slow in the North, there are early indicators that employers and candidates alike are finding new ways to adapt. The pace of decline in permanent hiring is easing, and temp billings have picked up for the first time in nearly a year – a sign that employers are responding with agility to current economic conditions.
“Candidate availability remains strong, giving businesses a valuable opportunity to access a wide and diverse talent pool. Encouragingly, the slower pace of growth in supply suggests fewer redundancies and signals a market that’s beginning to rebalance.”
Neil Carberry, REC chief executive, said: “Recruiters have been reporting a trend towards stabilisation in the permanent job market since the summer, and today’s data back that up for September. The temporary market remains somewhat healthier, with growth in some regions. We can hope that the jobs market and the economy may be moving towards calmer waters, but falling vacancies is a reminder that what is really needed is a shot of confidence in the wider economy to get things going.
“Pay trends remain subdued where pay is set by the market rather than the Government. This suggests that pay growth should not be a drag on the Bank of England’s upcoming interest rate decision.
“The economic picture is still challenging for employers, with pressures beyond their control. A genuinely pro-business, pro-growth Autumn Budget next month could provide much-needed relief, by avoiding unaffordable tax rises on business, committing to real practicality on the Employment Rights Bill, supporting flexible work and reforming public sector hiring.”
