Langley James IT Recruitment Market Review – the North – February 2019
March 21, 2019 . 10:00 am
Key findings from the February survey:
– Further decline in permanent placements amid uncertain outlook
– Permanent and contract staff availability deteriorates
– Starting pay inflation remains marked
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“Overall the labour market has been incredibly resilient over the last couple of years as employers have opted to hire more permanent and temporary staff rather than invest in long term productivity gains. However in 2019 Brexit uncertainty is having an opposite and chilling effect on the jobs market, with firms reassessing their level of risk.
“With a decision on Brexit now imminent we’re seeing companies freeze or slow the pace of new hires, whilst at the same time the number of people looking to enter the jobs market has declined further. Vacancy growth is now back to the levels we saw around two and a half years ago.
“With unemployment at its lowest level since 1975, widespread skills shortages are also cooling the jobs market with the most acute issues to be found in sectors such as IT, engineering, 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.
“Once a political decision is made on Brexit we expect a wave of pent-up investment to be released in parallel with a renewed focus on cost reduction. This should result in another busy time for the jobs market later this year.”
Recruitment & Employment Confederation Chief Executive Neil Carberry 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.”
Permanent placements decline in February
Permanent staff appointments in the North of England fell for the second month in a row during February. Some recruiters suggested that the decline was related to Brexit uncertainty. That said, the latest reduction was only moderate overall, with the rate of contraction having eased from January.
Renewed rise in contract billings
February data pointed to a rebound in contract billings in the North of England. The modest increase represented a recovery after the first contraction for six-and-a-half years in January. However, the rate of expansion was softer than across the UK as a whole.
Demand for both permanent and contract staff in the North of England continued to rise during February. Permanent job vacancies grew solidly, with the rate of increase accelerating slightly from January. However, the expansion remained softer than the national trend. Although marked overall, the latest rise in short-term vacancies was unchanged from January’s 29-month low, and below the UK average.
Softer fall in permanent staff availability during February
Permanent staff supply continued to fall in February, extending the current sequence of contraction to just over six years. Panellists suggested that the latest decrease was caused by a combination of high employment and a reluctance to seek new roles amid Brexit uncertainty. The rate of reduction remained sharp overall, despite easing from January.
February sees further marked decline in contract candidate numbers
Recruiters in the North of England reported a further decline in the supply of contract candidates midway through the first quarter. The rate of deterioration weakened from January, but was still sharp overall. Some panel members associated the contraction with contract workers leaving the UK.
Starting salaries rise at sharper rate in February
Latest survey data pointed to a rise in starting salaries offered to permanent workers in the North of England. Moreover, the rate of inflation accelerated since the start of the year and was in line with the UK average. Recruitment consultancies regularly commented that higher pay offers were required to attract sufficiently skilled candidates.
Contract wage inflation accelerates sharply
Wages received by short-term staff in the North of England rose markedly during February. Notably, the pace of increase quickened to the sharpest for seven months. The rise was also faster than the UK average for the first time since last August.
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 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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