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Langley James IT Recruitment Market Review – the North – December 2018

January 10, 2019 . 4:47 pm

Key findings from the December survey:
– Slowest rise in permanent placements since April 2013
– Steeper falls in availability of both permanent and contract staff
– Strong demand for staff pushes up starting pay

Commenting on the latest survey results, Chris Hearld, Northern Regional Chairman at KPMG UK said:
“The North is creating a healthy and encouraging volume of new roles, but we might see a two speed market emerging as Brexit approaches. While there is still strong growth in permanent vacancies, there seems to be evidence that uncertainty may be weighing down on long term planning, which has softened the pace at which those positions are opening up. Business leaders appear to be considering more flexible labour options right now so they can retain capacity, but also respond quickly if trading conditions change significantly.”
Recruitment & Employment Confederation chief executive Neil Carberry said: 
“It’s no surprise that growth in new permanent jobs dropped to its lowest level in almost two years last month, because economic uncertainty is now affecting companies’ hiring plans. But the underlying strength of our labour market is still there – vacancies are high and contract placements rose in the run-up to Christmas. There are opportunities out there for people who want to change job in 2019.”

Staff Appointments

Slowest rise in permanent placements for 68 months
Recruitment agencies in the North of England signalled the softest increase in permanent staff appointments for over five-and-a-half years in December. The marginal expansion followed a second successive deceleration in the rate of growth. Some survey respondents indicated that Brexit uncertainty was having a negative effect on both the demand and supply of permanent staff.
Contract billings growth quickens
Contract billings in the North of England expanded at an accelerated rate at the end of the fourth quarter. The increase was sharp overall and broadly in line with the average recorded for 2018. Panellists mentioned greater demand for workers as a result of rising activity at clients.
Job Vacancies
Demand for permanent staff in the North of England rose at a sharp pace that was unchanged from November. That said, growth of demand remained softer than that seen earlier in the year. Contract staff vacancies in the North of England grew markedly at the end of the fourth quarter. In fact, the rate of expansion was the quickest recorded since August 2017 and faster than the UK average.

Staff Availability

Sharpest fall in permanent candidate supply for one year
Permanent staff availability in the North of England continued to fall in December, extending the current sequence of contraction to 71 months. Moreover, the rate of decline was sharp overall and the fastest recorded in 2018. Some recruiters mentioned that candidates did not want to change jobs amid the current Brexit uncertainty.
Contract candidate numbers deteriorate at faster rate
Contract labour supply fell at the sharpest rate since August during December, as the pace of decline accelerated for the third month in a row. That said, the reduction in short-term staff availability was softer than the UK average for the fourth consecutive month.

Pay Pressures

Starting salary inflation accelerates at end of 2018
Permanent starting salaries in the North of England increased markedly in the final month of 2018. The pace of expansion was the joint-fastest in the past six months and far stronger than the historical average. Notably, the rate of growth was slightly quicker than the UK average. According to panellists, higher pay was offered in order to attract suitably skilled candidates.
Softer rise in contract wages during December
Remuneration for contract staff in the North of England rose sharply during December. However, growth was slower than that seen in November and remained softer than the UK average for the fourth month in a row.
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-onyear
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.

Regional Comparison 

Staff appointments
Permanent placements continued to increase across the UK in December. Though solid, the latest rise was the softest recorded since April 2017. The slowdown was driven by weaker expansions in three of the four monitored English regions. The South of England was the only area to record a sharp rise in permanent staff appointments. At the same time, UK contract billings grew at a faster rate than in November. The increase was also slightly quicker than the average for 2018. The South of England registered the steepest rate of expansion, while the Midlands was the only covered English region to report a softer rise.
Candidate availability
Permanent labour supply across the UK fell for the sixty-eighth month in a row during December. The decline was quicker than that seen in November and sharp overall. At the regional level, permanent staff availability fell at faster rates in the South and North of England, and at weaker rates in London and the Midlands. Meanwhile, there was a softer decrease in contract worker availability across the UK during December. The rate of deterioration eased for the second month in a row to reach its least marked pace since March. Three of the four monitored English regions reported a softer fall in contract candidate availability, with the North of England the only area to see contract worker supply fall at a steeper rate.
Pay Pressures
Permanent starting salaries continued to rise sharply across the UK during December. This was despite the rate of inflation edging down further from September’s recent peak. The UK trend was driven by slower rises in the Midlands and the South of England, while faster increases were seen in London and the North of England. Similar to the trend for permanent salaries, contract pay rates rose at a softer pace at the national level during December.
Nonetheless, the increase was still sharp overall and faster than the average for 2018. The slowdown was broad-based at the regional level, with all four of the monitored English regions recording slower rates of contract wage inflation.

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 18 years have worked with some of the most respected companies.

The average time from 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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