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

July 17, 2019 . 9:00 am

Permanent placements increase solidly in June, as contract billings fall slightly

Key findings from the June survey:
– Solid rise in permanent staff placements
– Permanent candidate availability falls at softest rate in eight months
– Starting salaries increase sharply

Commenting on the latest survey results, Nicola Quayle, Office Senior Partner at KPMG in Manchester said:
“There was a slowdown in recruitment activity across the North midway through 2019 as political and economic uncertainty persisted. Dented confidence and a more cautious approach to hiring from local firms has slowed permanent appointments and pushed temporary hires into reverse. Likewise, candidates will be increasingly reluctant to change roles until they can make more informed decisions on their futures and get a better view on the health of the economy.”
Recruitment & Employment Confederation Chief Executive Neil Carberry said:
“The jobs market has slowed a little, but one issue which shows no sign of relenting is the shortage of qualified candidates in some areas. Agencies employing temporary workers do all they can to train them to fill these vacancies, but this is made more difficult by the constraints of the apprenticeship levy. It is high time that this policy was reformed.”

Staff Appointments

Solid rise in permanent staff placements
The number of permanent staff appointments in the North of England increased solidly over the course of June. The region continued to outperform the UK overall, although the rate of  growth was softer than that seen in May. Recruiters that reported an expansion in permanent placements during the month related this to strong demand for staff across multiple sectors.
Billings for contract staff decrease marginally
For the second consecutive month, Northern recruitment consultants signalled a drop in contract staff billings. However, the decline in June was notably weaker than in May, and marginal overall. Anecdotal evidence partly linked the fall in billings to a shift to permanent job roles. However, other recruiters saw increased demand for contract staff during the month.

Job Vacancies

Vacancies for permanent staff in the North of England continued to rise sharply at the end of the second quarter. The increase was softer than the 21-month high recorded in May, but remained stronger than the average for the UK. Similarly, the amount of unfilled contract roles grew at a less marked pace in June compared to May, despite remaining quicker than the UK-wide trend.

Staff Availability

Permanent staff availability falls at softest rate in eight months
Latest survey data signalled another sharp fall in permanent staff availability in the North of England in June. That said, the rate of decline slowed to the least marked since October 2018. As with past months, recruiters found that Brexit related uncertainty made people unwilling to change jobs. Skill shortages were also attributed to the fall in candidate numbers.
Marginal fall in contract staff supply
Recruiters in the North of England saw only a slight drop in the availability of contract staff in June. It was the weakest decline recorded in the current 69-month sequence of deterioration, and much softer than that seen across the UK as a whole. Some panellists continued to report a lack of skilled workers in the jobs market, reducing staff supply. Others meanwhile found that new technology and improved marketing helped to find contract candidates for roles.

Pay Pressures

Starting salaries rise sharply in June
Salaries for new permanent staff in the North of England increased at a steep pace during June. The rate of inflation was broadly similar to the recent trend, only slightly softer than that seen in May but narrowly beating the UK average. Pay generally increased due to a shortage of candidates in the region, panellists noted.
Contract wage growth remains marked
Broadly in line with May’s result, wages for short term workers in the North of England increased at a sharp rate in June. Recruiters found that this was often caused by a lack of candidates for contract roles. The rate of inflation matched that seen for the UK as a whole, which recorded the fastest rise in average hourly pay rates since last November.

Official Data: UK Average Weekly Earnings
Latest data published by the Office for National Statistics indicated that average weekly earnings across the UK increased by 2.2% year-on-year over the first quarter of 2019. The upturn was led by the East Midlands, which saw pay increase 11.4% to £574. London was the only area to register lower pay compared to a year ago, with average weekly earnings falling by -2.3% to £762.

Regional Comparison

Staff appointments
Recruitment consultancies across the UK recorded a fourth consecutive monthly reduction in permanent staff placements during June. The rate of decline was modest and only slightly softer than the one in May, but nonetheless marked the joint longest fall in staff appointments in roughly a decade. Three of the four monitored English regions saw an overall drop in permanent hires, with the North of England the only area recording an increase.
At the same time, billings received from the employment of contract staff across the UK saw a marginal uptick. Despite rising from May, the rate of growth was the second-weakest in the current 74-month sequence of expansion. Higher contract billings in London and the South of England contrasted with slight declines in the Midlands and North of England.
Candidate availability
Permanent labour supply deteriorated sharply in June, extending the current period of reduction to 74 months. Notably, the rate of decline remained much quicker than the historical average. All surveyed English regions registered an overall drop in candidate availability, with the South of England seeing the steepest fall while the Midlands recorded the softest.
Contract staff availability across the UK dropped at a slightly less marked pace in June. Nevertheless, the overall decline in short-term candidates remained sharp. The North of England registered only a marginal fall, the softest recorded in the near six-year sequence of deterioration, whereas London saw the quickest rate of contraction.
Pay Pressures
Starting salaries for permanent workers across the UK continued to rise in June, extending the current sequence of growth to just over seven years. The pace of increase was sharp and broadly in line with that seen throughout the past three months. The Midlands recorded the quickest rise in permanent starting salaries, while London continued to register the slowest increase.
Meanwhile, remuneration for contract staff across the UK rose sharply and at a similar pace to that seen in May. At the regional level, faster wage growth was recorded in the Midlands and North of England, while London and the South of England saw weaker increases in pay.

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

To find out why so many companies turn to Langley James for support in fulfilling their IT recruitment needs, call and speak to one of our specialist consultants today on 0207 788 6600.

In conjunction with: IHS Markit and sponsored by the Recruitment and Employment Confederation.