Langley James IT Recruitment Market Review – London – February 2019
March 21, 2019 . 10:00 am
Key points from February survey:
– Renewed rise in permanent staff appointments…
– …matched by return to growth of contract billings
– London leads starting salary inflation regionally
Commenting on the latest survey results, Bina Mehta, Partner at KPMG UK said:
“It’s encouraging to see businesses have resumed their hiring efforts despite a dip in January. However, a continued lack of good candidates making themselves available to businesses with growth on their minds is a real concern for the future prosperity of London. “Widespread skills shortages and a lack of good candidates is having an impact on key London sectors such as IT, hospitality, and nursing. This means candidates with the right skills are commanding ever higher premiums and pay growth is now at a 10-year high. This has seen pay outstripping living costs meaning people feel better off – which is good news, unless you are an employer, with SME businesses being most impacted.”
Neil Carberry, Chief Executive at the REC, said:
“The resilience of employers and the British jobs market shines through in today’s Report on Jobs. While numbers are clearly weaker than we have seen over the past few years, the survey suggests businesses are ready to create jobs if the investment environment is right. Recruiters are playing a crucial role in helping their clients fill gaps. As we draw closer to Brexit day, uncertainty and concern has grown, putting the sustainability of positive jobs news at risk. Firms are looking for politicians to find a solution to the current deadlock that gives them the certainty they need to invest and create jobs.”
Renewed increase in permanent appointments
Recruitment consultancies in the capital signalled growth of permanent placements in February, reversing the decline noted at the start of 2019. Moreover, the respective seasonally adjusted index posted a reading that matched its long-run average. Survey participants indicated that, following a challenging January, clients resumed their hiring efforts.
Solid rise in contract billings
After contracting in January for the first time in two-and-a-half years, contract billings in London increased during February. The pace of expansion was solid and broadly in line with the national average. Anecdotal evidence indicated stronger demand for contractors across digital change programmes as well as greater requirements due to Brexit.
Permanent job vacancies in London continued to increase, taking the current stretch of growth to 29 months. Although marked, the pace of expansion eased to the weakest since November 2016 and was softer than the UK average. Contract vacancy growth re-accelerated in February, but the rate of expansion remained below both its long-run trend and the national average.
Steep fall in permanent staff availability
February data pointed to a further reduction in the number of people looking to undertake permanent employment in London. The rate of contraction remained steep, despite slowing from January. Panellists mentioned shortages of catering, financial, healthcare, IT and marketing professionals.
Downturn in contract supply accelerates
Not only did contract availability decrease for the sixty-seventh straight month, but also at the quickest rate since November 2017. Furthermore, the contraction was more pronounced than noted at the UK level. There were reports of scarce labour for a wide range of roles, including translators, receptionists, marketing, catering, finance and developers.
Starting salary inflation fastest across English regions
Average starting pay for permanent workers in London continued to increase midway through the first quarter, which survey participants linked to competition for staff. Although weakening to a four-month low, the rate of salary inflation was the highest of the four monitored English regions and above its long-run average.
Contract wage inflation weakest since October 2016
Although contract pay in the capital continued to increase, the rate of inflation waned. The modest rise noted in February was the slowest in 28 months and much weaker than seen across the UK. In fact, fewer than 9% of survey participants signalled higher contract wages, with the vast majority (86%) noting no change.
Official Data: UK Average Weekly Earnings
Latest data from the Office for National Statistics showed that average weekly earnings across the UK increased by 4.2% on an annual basis over the third quarter of 2018. The East Midlands posted the strongest year-on-year rise in pay, up 7.4% to £554. The steepest fall was meanwhile seen in the North East, where weekly earnings were down -6.4% compared to a year ago to £494.
Permanent staff placements across the UK stabilised in February, following the first contraction for two-and-a-half years in January. Broken down by region, higher permanent appointments in London and the South of England helped to offset falls in the Midlands and the North of England. UK contract billings rose markedly midway through the first quarter, with the rate of increase picking up from January. Renewed increases in contract billings were seen in London and the North of England, while growth picked up in the South of England. The Midlands registered a softer, but still sharp, rate of expansion.
Latest survey data pointed to another fall in permanent staff supply across the UK. However, February’s decline was the softest for just under a year, with slower reductions recorded in each of the four covered English regions. The rate of deterioration was quickest in London, and weakest in the Midlands. Contract worker availability in the UK also decreased during February. The rate of reduction eased since the start of 2019, but remained stronger than the historical average. London was the only covered English region to record a faster deterioration in short-term staff supply in February.
Permanent starting salaries in the UK continued to increase sharply during February. That said, the rate of growth was the softest recorded since July 2018, with slower rises in three of the four monitored English regions. The North of England was the only location to see the rate of inflation quicken from January. In line with the trend for permanent pay, wages earned by contract staff also grew markedly in February. This was despite the rate of increase easing to the slowest for just over a year. Faster rises in the Midlands and North of England contrasted with softer growth in London and the South of England.
About Langley James
Langley James was founded in 1999 by James Toovey, a highly respected recruitment industry professional. James wanted to provide something unique: a bespoke recruitment service which was founded on service excellence. With offices in London and Chester, we are now providing our recruitment services throughout the world and over the last 19 years have worked with some of the most respected companies.
The average time form taking a role…
– and Delivering a Qualified Shortlist of Candidates 3 days
– and First Confirmed Interview 5 days
– and Confirmed Placement 8 days
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