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

April 24, 2019 . 11:35 am

Key findings from the March survey:
– Modest growth in permanent placements
– Fastest increase in permanent staff demand for four months
– Labour supply continues to contract sharply

Commenting on the latest survey results, Nicola Quayle, Office Senior Partner at KPMG in Manchester said:
“The first increase in permanent hires of 2019 is encouraging, especially when viewed in the context of the North being the only English region to see an increase in permanent placings at all this month, and also alongside a backdrop of rapidly rising demand for new staff. Businesses need to be firing on all cylinders if they’re going to effectively respond to the challenges and opportunities that lie ahead. A continued contraction of the region’s labour market could threaten this, so management teams must consider how best to attract talent in a competitive skills market where permanent staff availability continues to decline.”

Recruitment & Employment Confederation Chief Executive Neil Carberry said:
“We have a fantastic labour market that has delivered high employment and flexibility for workers because it helps companies meet their needs easily. It’s a British success story. But Brexit uncertainty has put the brakes on.
“With business investment rates poor, and little certainty about the path ahead, today’s data shows that the time for political game-playing is over – this situation is beginning to affect people’s daily lives as permanent staff appointments fell, and the growth of temporary jobs and starting salaries weakened.”

Staff Appointments
First rise in permanent staff placements for three months
Following contractions in the opening two months of 2019, the number of people placed into permanent job roles across the North of England increased during March. That said, the rate of growth was only moderate overall and softer than the historical average. According to panellists, demand for permanent workers stemmed from rising business requirements at clients.
Contract billings growth improves to five-month high
March data pointed to a sharp and accelerated rise in billings received from the employment of contract workers in the North of England. Notably, the rate of expansion was sharp overall and the fastest since October 2018. Recruitment agencies generally linked growth to higher demand for short-term staff, with engineers and industrial workers mentioned in particular.
Job Vacancies
Demand for both permanent and contract workers continued to increase in the North of England during March. The number of permanent staff vacancies grew at the quickest pace for four months and was faster than the UK average. Short-term positions across the region meanwhile rose solidly for the third month in a row. That said, the rate of expansion remained slower than the UK-wide trend.

Staff Availability
Permanent labour supply falls at slightly quicker rate
As has been the case in each month since February 2013, permanent staff availability in the North of England deteriorated in March. Moreover, the rate of decline was sharp and slightly faster than in February. Anecdotal evidence suggested that the latest contraction in supply was driven by Brexit uncertainty.
Stronger deterioration in contract candidate numbers 
Recruitment consultancies based in the North of England reported a sustained fall in the supply of contract workers at the end of the first quarter. The rate of reduction accelerated from February and was quicker than the UK average for the first time since last August. As was the case with permanent candidates, the deterioration was commonly attributed to Brexit uncertainty.

Pay Pressures
Permanent starters’ pay continues to rise sharply
The rate of starting salary inflation across the North of England remained historically sharp in March, despite a slight softening from February. The rise in starting pay was also quicker than the UK average for the first time in three months. Recruiters in the region suggested that both increasing demand for staff and a reduction in supply had driven up pay offers.
Softest rise in contract pay for five months
Remuneration awarded to contract workers across the North of England continued to increase markedly in March. The latest rise extended the current run of inflation to 79 months. That said, the rate of pay growth eased to its softest since last October and was slower than the UK average.

Official Data: UK Average Weekly Earnings
Data from the Office for National Statistics signalled that average weekly earnings across the UK rose by 5.4% year-on-year to £637 in the final quarter of 2018. London saw the strongest annual rise, with pay up 13.1% to £846. Meanwhile, the weakest increase was in the South East, with average weekly earnings rising by just 0.5% on the previous year to £685.

Regional Comparison 
Staff appointments
After stabilising in February, permanent staff placements fell for the second time in three months across the UK during March. Though only moderate overall, the latest fall was the fastest since July 2016. The downturn was driven by contractions in three of the four monitored English regions. The North of England was the only area to record a rise in permanent staff appointments. At the same time, contract billings continued to rise, which extended the current run of expansion to nearly six years. However, the rate of growth eased from that seen in February, with softer increases in the Midlands and London, alongside a contraction in the South of England. Meanwhile, recruiters in the North of England reported the fastest expansion for five months.
Candidate availability
Permanent staff availability fell further across the UK during March. The pace of decline accelerated from February, with quicker contractions in both the South and North of England. Meanwhile, the rate of deterioration softened in London and was broadly unchanged in the Midlands. In contrast, contract labour supply fell at the slowest pace since January 2017 at the national level. This was driven by softer deteriorations in three of the four monitored English regions. Notably, the Midlands recorded its weakest reduction for five-and-a-half years. The North of England was the only area to report a faster decline than in February.
Pay Pressures
As has been the case in each month since May 2012, permanent starting salaries across the UK rose during March. Though sharp overall, the rate of growth eased to its softest for almost two years. All four monitored English regions recorded a slower rise in permanent starting pay. Similar to the trend for permanent salaries, remuneration for contract workers in the UK increased at a slower rate in March. Although the latest rise was still sharp, it was softer than the average for 2018. The national trend was largely driven by a weaker rate of inflation in the North of England and a broad stagnation of contract pay in London.

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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