Although the latest KPMG and REC, UK Report on Jobs: North of England survey signalled a sustained decline in hiring activity in April, rates of contraction in both permanent placements and temp billings moderated since March.
Job vacancies likewise declined at weaker rates at the start of the second quarter. Staff availability for both permanent and short-term roles in the region continued to increase rapidly, however.
Notably, there was a renewed rise in salaries awarded to new permanent joiners in April, following modest reductions in February and March.
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.
Permanent placements fall at softest rate since last August
The number of people placed into permanent roles across the North of England decreased further in April, thereby stretching the current run of contraction to 22 months. Surveyed recruiters linked the downturn to hiring hesitancy due to recent rises in payroll costs and a reduction in the number of job openings.
Whilst the rate of contraction was the least pronounced for eight months and softer than the UK average, it remained historically sharp overall. It also contrasted with the survey’s long-run trend of rising placements.
April data signalled a further drop in billings from the employment of short-term staff across the North of England. Panellists often noted a reduction in demand for temp staff. Some employers were reportedly reluctant to hire due to the increase in National Insurance and concerns around costs.
The latest drop in temp billings was sharp, despite easing from that seen in March. All four monitored English regions posted reductions in temp billings. The only area to register a quicker fall in billings than the North of England was the South of England.
April survey data highlighted another sharp reduction in demand for permanent staff across the North of England. However, the downturn showed further signs of easing, with the rate of contraction the slowest seen in 2025 to date.
The rate of decline in temp vacancies in the North of England likewise softened in April. The pace of contraction was the softest seen in the year to date, albeit solid overall.
Job vacancies for both types of staff in the North of England fell at slower rates than seen on average across the UK as a whole.
Further rapid rise in permanent staff supply in April
The start of the second quarter saw permanent staff availability in the North of England rise for the sixteenth month in a row. The rate of expansion eased only slightly from March’s recent high and was the second-sharpest since December 2020.
Recruiters linked the upturn in candidate numbers to increased redundancies. The North of England posted the fastest rise of all four English regions monitored by the survey for the second straight month.
Recruiters based in the North of England indicated a rise in temp staff supply in April, stretching the current trend of growth to 26 months. Although the rate of expansion was softer than in March, it was sharp by historical standards.
The latest increase reflected a combination of redundancies and reduced demand for short-term staff, panellists reported. The rise in temp staff availability in the North of England was the quickest seen across all four monitored English areas, just outpacing that seen in the South of England.
First rise in permanent starting salaries for three months
The seasonally adjusted Permanent Salaries Index rose above the crucial 50.0 mark in April to signal a fresh increase in permanent starters’ pay in the North of England. Though modest, the upturn ended a two-month period of decline.
Panellists attributed higher salaries to efforts to attract suitably skilled candidates, the filling of more senior roles, and also the recent uplift in the national minimum wage. The North of England recorded a slower rise in starting salaries than that seen at the UK level, however.
Average hourly rates of pay for short-term staff across the North of England rose in April, extending the current trend of growth to nearly one-and-a-half years. The rate of inflation was the most pronounced since June 2024 and solid.
Panellists widely reported that stronger than average increases in the national minimum and living wage rates had pushed up pay. The rate of temp pay growth in the North of England was broadly in line with that seen UK-wide.
Commenting on the latest survey results, Phil Murden, Leeds Office Senior Partner at KPMG UK, said: “Recruitment activity in the North of England remains subdued, yet April has shown the labour market is entering a period of transition rather than continued decline. Permanent placements have been falling for nearly two years, but in the past month, this decline has softened, signalling an element of confidence improving among employers in our region.
“The early April changes to employment costs have seen employers continue to adopt a more conservative stance on hiring as they absorb these increased financial pressures, particularly when it comes to short-term staff. The Bank of England’s decision to cut interest rates last week will of course be welcomed by many as lower borrowing costs help to offset increasing costs elsewhere.
“We are also seeing a surge in candidate availability across both permanent and temporary markets, driven largely by restructuring and cost-cutting measures. Despite a more competitive talent landscape, employers are beginning to raise starting salaries again, especially where specific skills or senior roles are concerned. This suggests that businesses are carefully prioritising critical hires while rethinking workforce strategies for the long term.”
Neil Carberry, REC Chief Executive, said: “Given the bow wave of costs firms faced in April, maintaining the gradual improvement in numbers we have seen over the past few months is on the good end of our expectations for the UK. While we are yet to see real momentum build, hopes of an improving picture in the second half of the year should be buoyed a bit by today’s data.
“Recruiters in the North are actively struggling to fill some roles in key sectors such as accounting and finance, blue collar, IT, and engineering because of a lack of skilled workers
“Last week’s interest rate move is well-timed, offering some relief for businesses, with pay pressures now more contained.
“The biggest single drag factor on activity right now is uncertainty. Some of that can’t be helped, but payroll tax costs and regulation design is in the government’s gift. Businesses have welcomed positive discussions with Ministers on the Employment Rights Bill, but now it is time for real changes to address employers’ fears and boost hiring. A sensible timetable and practical changes that reduce the red tape for firms in complying with the Bill will go a long way to calming nerves about taking a chance on someone.”
