Permanent Placements Fall in Midlands

July 09, 2012 /

The number of permanent placements in the Midlands fell in June, ending a four-month sequence of growth. The solid reduction in placements represented a marked turnaround from a sharp rise in May. Permanent appointments also declined across the UK as a whole, and at a slightly faster pace than in the Midlands.

In contrast to the trend for permanent placements, temporary billings increased again in June. The latest rise in the region was the fourth in as many months, but the joint-weakest in this sequence. Rising temporary billings in the Midlands contrasted with a fall at the UK level.

The South of England was the only region to record growth in permanent placements in June, with the sharpest fall seen in London. Meanwhile, temporary billings declined in each region with the exception of the Midlands.

Demand for permanent staff in the Midlands continued to rise in June, and at a solid pace that was sharper than the UK economy average. The number of vacancies for short-term positions also increased during the month. Although the latest rise in the region was the slowest since February, it was still faster than that seen across the UK as a whole.

Temporary candidate numbers increase

For the third consecutive month, the Midlands saw a decline in the availability of permanent candidates in June. This compared with an increase at the UK level. However, the pace of reduction in the region was only slight, and weaker than that seen in the previous month. After declining slightly in May, the number of temporary candidates in the Midlands increased in June. Availability in the region has now improved in 22 of the past 23 months. That said, the increase in temporary candidates in the Midlands was slower than that seen across the UK economy as a whole.

Both the Midlands and the South recorded falling permanent candidate availability, in contrast to marked rises in the North and London. All four regions posted increases in the number of temporary candidates, with the sharpest rise seen in the North.

Wages and salaries rise

Permanent salaries increased in the Midlands during June, ending a two-month period in which salaries had fallen. The rate of inflation in the region was only modest and slower than the series average, but was
stronger than that recorded across the UK as a whole. Hourly pay rates for temporary staff continued to increase, with respondents partly linking the rise to changes in Agency Worker Regulations. The increase in the Midlands was the eleventh in a row, and was broadly in line with that seen in May.

Meanwhile, pay rates were largely unchanged at the UK level.

The Midlands and the North posted modest increases in permanent salaries, while they fell in London and the South. The Midlands registered the fastest rise in temporary pay rates, with the South the only other region to post an increase.

Recruitment and Employment Confederation chief executive Kevin Green says: “In the Midlands there was a particularly sharp drop in the number of people placed into permanent work last month – which is really disappointing. A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer.

“The UK labour market has been remarkably resilient throughout the downturn and our slow economic recovery. However, employer confidence is fragile and it’s not that surprising that under the weight of the eurozone crisis and other bad news placements fell in June.

“I expect as we continue to make slow progress out of recession that we’ll see this kind of a zig-zag pattern with some good months followed by weaker ones – rather than sustained periods of uninterrupted jobs growth.

“There is still demand for workers and vacancies continue to rise. Recruiters tell us that employers are still hiring, but their increased sense of caution is manifesting in them taking longer to make decisions
and to confirm hires – and that slow down in the recruitment process is clearly having a negative impact on the number of placements.

“But it’s also important to note that the picture is not uniform across all industries. If you are a skilled
engineer or IT professional there is still increasing demand for you from employers.”

Steve Hollis, Midlands Chairman of KPMG in the Midlands comments: “After four months of consecutive growth, the latest recruitment data comes as a sobering reminder that we’re far away from a confident economic situation. However, the sharp fall in permanent placements was contrasted by a rise in demand for permanent
staff, suggesting that companies in the Midlands are willing to invest in staff, but are struggling to find the right candidates for the roles they are recruiting for.

“We must also be aware of the wider national picture which this month saw a widespread decline in the number of staff taken on in both permanent and temporary roles. These figures have come on the back of the continuing uncertainty in the Eurozone, the Greek elections and a worsening debt position in Southern Europe. This has dented confidence and created nervousness around investment, which in turn has impacted job creation.

“However, a real worry for me is the acceleration in the pace of decline, which if unabated isn’t a mere
blip. If this trend were to continue, there’s a very real chance we could see 3 million unemployed in the UK
and in the not too distant future.”


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