Job Market Report March – ‘Uncertainty’

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We’ve got the latest stats on job skills shortages, the availability of candidates for the job market and how salaries in Dorset and the south are moving
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We’ve extracted the key points for you – from IHS Markit’s & KPMG’s latest report.

‘Uncertainty leads to falls in permanent placements and temp billings in March’

KEY FINDINGS

  • Permanent placements fall for the first time since July 2016
  • As temp billings decline for first time since April 2013
  • Sustained drop in candidate availability leads to further increases in pay

Permanent Placements Index – 48.6 (Feb 51.7)
Temporary Billings Index – 48.7 (Feb 52.7)

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

“After months of bucking the UK trend and carrying on regardless amid Brexit uncertainty, it seems businesses in the South have pressed the ‘on hold’ button when it comes to hiring staff.
“This March saw temporary hires drop for the first time since 2013, with permanent hires seeing their biggest drop since July 2016. No doubt businesses expected some clarity at the end of March and put hiring on hold for a short while.
“Unfortunately nobody got the certainty they were after. This shows that it’s even more critical that a solution to Brexit is found before the uncertainty itself further impacts our local economy and opportunities.”

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

“We have a fantastic labour market that has delivered high employment and flexibility for workers because it helps companies meet their needs easily. It’s a British success story. But Brexit uncertainty has put the brakes on.
“With business investment rates poor, and little certainty about the path ahead, today’s data shows that the time for political game-playing is over – this situation is beginning to affect people’s daily lives as permanent staff appointments fell, and the growth of temporary jobs and starting salaries weakened.”

STAFF APPOINTMENTS

Permanent staff appointments decline during March

Latest data showed that the number of people placed into permanent job roles in the South of England fell in March. Though modest, it was the first reduction since July 2016. Survey respondents widely attributed the fall to heightened political and economic uncertainty ahead of the UK’s departure from the EU. There were also reports that poor candidate availability had restricted placement numbers. Permanent placements also fell modestly at the national level in March.

Temp billings fall for first time since April 2013

Billings received from the employment of temporary/contract workers in the South of England fell for the first time in nearly six years in March. The rate of decline was moderate overall, but contrasted with a solid increase across the UK as a whole. Panellists commonly indicated that staff hiring plans in the South were placed on hold due to Brexit-related uncertainty.

JOB VACANCIES

March survey data pointed to softer increases in demand for both permanent and temporary workers in the South of England. Though sharp, and above the national average, the latest upturn in permanent job vacancies in the region was the softest recorded since August 2016.

Demand for temporary staff in the South of England also expanded at the weakest rate for 31 months. Notably the increase was slower than that seen across the UK as a whole.

STAFF AVAILABILITY

Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month.

Accelerated decline in permanent candidate supply

Recruitment consultancies in the South of England signalled a sustained fall in permanent staff availability in March. Notably, the rate of decline quickened from the previous month to the sharpest since last October. Moreover, the reduction was steeper than the UK-wide average. There were widespread reports that people were reluctant to seek new roles due to economic uncertainty, while skill shortages across the UK also weighed on candidate supply.

Temp worker availability falls at softest pace for seven months

The supply of short-term workers continued to decline across the South of England at the end of the first quarter. Though solid, the rate of deterioration was the weakest in seven months and softer than that recorded for the UK as a whole. Survey respondents indicated that Brexitrelated uncertainty and a low unemployment rate had underpinned the latest reduction in temporary worker availability.

DEMAND FOR SKILLS

Recruitment consultancies are invited to specify any areas in which they have encountered skill shortages during the latest month.

Skills in short supply: Permanent staff

Accounting/Financial: Accountants, Accounts Auditors, Book Keepers, Estimators, Finance, IFAs, Taxation, Wealth Advisors.
Blue Collar: Automotive, Blue Collar Drivers, Industrial, LGV Drivers, Manufacturing, Production Managers, Semi-skilled Workers, Skilled Workers.
Construction: Construction, Sales, Quantity Surveyors.
Engineering: Design Engineers, Engineers, Geotechnical, Engineers Service Engineers Technicians.
Executive/Professional: Human Resources, Legal, Management, PR, Executives, Procurement, Senior Executives.
Hotel & Catering: Chefs. 
IT/Computing: C#, C++, CAD, CNC, Data Analysts, Developers, Digital, IT, Network, SDN, Oracle, Fusion, Software Developers, Technology.
Nursing/Medical/Care: Care Workers, Chemists, Health Care Assistants, Home Care Workers, Nurses, Support Workers.
Secretarial/Clerical: Office Staff .
Other: B2B Sales, Call Centre, Customer Service, Graduates, Sales, Security, Telesales.

Skills in short supply: Temporary staff

Accounting/Financial: Accountants, Accounts Cost Management, Credit Controllers, Finance, Financial Controllers, Financial Services, Payroll. 
Blue Collar: Blue Collar, Class 2 Drivers, Cleaners, Drivers, FLT Drivers, Industrial Packers, Production, Production Managers, Unskilled Workers, Warehouse, Welders.
Engineering: Engineers.
Executive/Professional: Human Resources, Legal, Project Managers.
Hotel/Catering: Catering, Chefs, Kitchen Porters. 
IT/Computing: CAD, CNC, Developers, Oracle, Fusion, Software Developers, Technology.
Nursing/Medical/Care: Care Workers, Health Care Assistants,  Home Care Workers, Nurses, Support Workers.
Secretarial/Clerical: Office Staff.
Other: B2B Sales, Call Centre, Customer Service, Graduates, Team Leaders.

PAY PRESSURES

The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.

Starting salary inflation edges down to a 27-month low

March survey data signalled a further sharp increase in average starting salaries across the South of England. Moreover, the pace of pay growth remained slightly stronger than the UK-wide trend. Higher salaries were often linked by respondents to greater competition for scarce skill sets. However, the rate of inflation softened for the second month in a row and was the least marked since December 2016.

Temp wages rise at a quicker pace

Recruiters in the South of England signalled a further increase in average hourly pay given to short-term workers in March. Notably, the rate of wage inflation accelerated from February’s recent low and was sharper than the UK average. According to panellists, candidate shortages and a general increase in local market rates had added upward pressure to pay.

OFFICIAL DATA: UK AVERAGE WEEKLY EARNINGS

Data from the Office for National Statistics signalled that average weekly earnings across the UK rose by 5.4% year-on-year to £637 in the final quarter of 2018. London saw the strongest annual rise, with pay up 13.1% to £846. Meanwhile, the weakest increase was in the South East, with average weekly earnings rising by just 0.5% on the previous year to £685.

REGIONAL COMPARISON

The KPMG and REC, UK Report on Jobs: South of England is one of four regional reports tracking labour market trends across England. Reports are also available for London, the Midlands and the North of England.

Staff appointments

After stabilising in February, permanent staff placements fell for the second time in three months across the UK during March. Though only moderate overall, the latest fall was the fastest since July 2016. The downturn was driven by contractions in three of the four monitored English regions. The North of England was the only area to record a rise in permanent staff appointments. At the same time, temp billings continued to rise, which extended the current run of expansion to nearly six years. However, the rate of growth eased from that seen in February, with softer increases in the Midlands and London, alongside a contraction in the South of England. Meanwhile, recruiters in the North of England reported the fastest expansion for five months.

Candidate availability

Permanent staff availability fell further across the UK during March. The pace of decline accelerated from February, with quicker contractions in both the South and North of England. Meanwhile, the rate of deterioration softened in London and was broadly unchanged in the Midlands. In contrast, temporary labour supply fell at the slowest pace since January 2017 at the national level. This was driven by softer deteriorations in three of the four monitored English regions. Notably, the Midlands recorded its weakest reduction for five-and-a-half years. The North of England was the only area to report a faster decline than in February.

Pay Pressures

As has been the case in each month since May 2012, permanent starting salaries across the UK rose during March. Though sharp overall, the rate of growth eased to its softest for almost two years. All four monitored English regions recorded a slower rise in permanent starting pay. Similar to the trend for permanent salaries, remuneration for temporary workers in the UK increased at a slower rate in March. Although the latest rise was still sharp, it was softer than the average for 2018. The national trend was largely driven by a weaker rate of inflation in the North of England and a broad stagnation of temp pay in London.

Thanks to our source: IHS Markit for this report data

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