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Langley James IT Recruitment Market Review – the North – January 2019

February 15, 2019 . 2:16 pm

Key findings from the January survey:
– First decline in permanent placements for 77 months
– Faster falls in both permanent and contract availability
– Staff shortages lead to further rises in pay

Commenting on the latest survey results, Chris Hearld, Northern Regional Chairman at KPMG UK said:
“Northern businesses might want to hire staff, but a chronic shortage of labour – particularly skilled workers – is now starting to bite. Not only will companies feel under resourced, they are also seeing wage and salary demands increase which will put more pressure on the bottom line.
“The message coming from the data is clear – the local business community needs to make sure that it continues to invest in creating, attracting and retaining talent if it to remain resilient and competitive.”

Recruitment & Employment Confederation chief executive Neil Carberry said:
“This is the first month since July 2016 where permanent placement numbers have dropped, with weaker – but still positive – performance for temporary roles, and the lowest rate of vacancy growth for over two years. But we should be careful not to overreact – employment rates are high, and the performance of our labour market overall is still strong. That said, the survey results are a sharp reminder to politicians in Westminster and in Brussels of the need to provide businesses with clarity about the path ahead, so they can invest with confidence.”

Staff Appointments

Permanent staff placements fall for the first time in 77 months
January data pointed to a renewed fall in the number of people placed into permanent job roles across the North of England. The reduction was the first seen since August 2012, and the fastest for just over six-and-a-half years. Some recruitment agencies commented on a hesitancy in hiring among their clients due to Brexit-related uncertainty. Permanent staff appointments also declined at the national level at the start of 2019.
Contract billings decline for first time since July 2012
Billings received from the employment of short-term workers in the North of England fell for the first time in six-and-a-half years during January. Although recruitment consultancies reported only a marginal rate of decline overall, the result contrasted with a modest expansion across the UK as a whole.

Job Vacancies

January survey data pointed to softer increases in demand for both permanent and contract workers in the North of England. Notably, permanent staff vacancies grew at the slowest rate for 29 months. Despite registering a solid rise overall, growth of demand was also softer than that seen at the national level. Short-term positions also rose at the weakest rate since August 2016, and at a pace that was slower than the UK average.

Staff Availability

Sharpest fall in permanent candidate supply for 13 months
The number of candidates available to fill permanent job positions in the North of England fell in January. Permanent staff supply has now contracted in each month for the past six years. Moreover, the pace of decline quickened compared to December, registering the fastest fall since December 2017. Recruitment consultancies suggested that shortages were primarily for skilled workers.
Faster deterioration in contract staff availability
The availability of contract staff in the North of England fell during January, with the rate of decline accelerating to the quickest seen in five months. As was the case with permanent staff availability, recruiters mentioned a shortage of skilled workers.

Pay Pressures

Permanent starters’ pay continues to rise sharply
The rate of starting salary inflation across the North of England remained sharp in January, despite softening from December. Recruiters in the region widely mentioned that competition for scarce candidates had contributed to the latest upturn in pay. That said, the rate of inflation was not as strong as seen across the UK as a whole.
Contract pay rates rise markedly at the start of 2019
Remuneration awarded to contract workers across the North of England increased strongly in January. This was despite wage growth easing to its slowest since October 2018. Some anecdotal evidence linked the latest rise to a shortage of skilled workers. Pay inflation in the region was softer than the UK average for the fifth 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-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.

Regional Comparison

Staff appointments
Permanent staff appointments fell across the UK for the first time in two-and-a-half years during January. Albeit only marginal, the decline was driven by contractions in three of the four monitored English regions. The South of England was the only area to record growth. Meanwhile, there was an overall increase in contract staff billings across the UK in January. However, the latest expansion was the softest since September 2015, as both
London and the North of England recorded declines. The Midlands posted the fastest rate of growth, with a strong increase overall.
Candidate availability
January data signalled the sharpest fall in permanent candidate availability in the UK since May 2017, extending the current run of decline to 69 months. The steeper contraction in available permanent workers was driven by London, which registered its strongest downturn for eight months and the fastest across all English regions. There was also a fall in availability of contract workers across the UK in January. The overall pace of decline was sharp and the fastest for 14 months. At the regional level, quicker falls in all four monitored English regions drove the latest decline, with the Midlands recording the sharpest contraction.
Pay Pressures
UK permanent starting salaries rose markedly during January. The pace of inflation accelerated to its fastest since October 2018. Quicker salary growth in the Midlands and South of England contrasted with slower expansions in London and the North of England. Wages earned by contract workers in the UK also rose in January. Though sharp overall, the increase in contract pay rates was weaker than that seen in December and the slowest for
three months. The South of England posted the quickest rise, followed by the Midlands, London and the North of England respectively.

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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