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

June 10, 2019 . 10:00 am

Fastest increase in permanent staff placements since January 2018

Key findings from the May survey:
– Permanent staff appointments rise at marked pace…
– … but contract billings decline solidly
– Lower candidate supply pushes up starting pay

Commenting on the latest survey results, Nicola Quayle, Office Senior Partner at KPMG in Manchester said:
“The North is charging ahead and making really positive gains in permanent job placements. However, whilst these figures might be an encouraging sign of the region’s health, we should not become complacent and be mindful of a gloomier national picture. There is also still much more that can be done to improve the local skills base. We need to prioritise building a workforce for the future to sustain economic growth and help the North become more resilient to economic and political disruption.”

Recruitment & Employment Confederation Chief Executive Neil Carberry said:
“The jobs market is still creating opportunities for those looking for work. With vacancies rising and starting salaries going up sharply, it is worth people talking to recruiters about that next step in their career.
“Overall, though, the survey again shows what uncertainty does to hiring plans, with total permanent placements dropping again.”

Staff Appointments
Sharpest rise in permanent placements since January 2018
Recruiters in the North of England reported a rise in permanent staff appointments during May. Moreover, the rate of increase accelerated to the fastest for 16 months and was sharp overall. Anecdotal evidence generally attributed the expansion to a rise in demand for permanent workers. In contrast, permanent staff appointments declined across the UK as a whole.
Fastest decline in contract billings for nearly seven years
Billings received from the employment of contract workers in the North of England fell for the first time since January in May. The rate of contraction was solid overall and the quickest for almost seven years. Panellists often linked the fall to a lack of vacancies at their clients. Contract billings meanwhile rose only marginally at the national level.

Job Vacancies
May survey data pointed to sharper growth in demand for both permanent and contract staff in the North of England.
Permanent staff vacancies in the region rose at the quickest pace since August 2017, expanding sharply overall. Meanwhile, demand for contract staff in the North of England increased at the fastest rate for five months. Notably, the expansions were both stronger than those seen for the UK as a whole.

Staff Availability
Slightly softer fall in permanent staff availability during May
May data signalled a further decline in permanent labour supply in the North of England, extending the current sequence of contraction to 76 months. The rate of deterioration was slightly slower than in April, but remained faster than the historical average. Recruiters suggested that the latest reduction was driven by Brexit-related uncertainty and a lack of skilled candidates.
Contract labour supply continues to fall markedly
The availability of contract staff in the North of England deteriorated for the sixty-eighth month in a row during May. The pace of decline was broadly consistent with that in seen April and marked overall. When explaining the latest fall, panellists often mentioned shortages of skilled candidates and a low level of unemployment.

Pay Pressures
Permanent starting salary inflation at three-month high
Recruiters in the North of England recorded a further rise in permanent starting salaries midway through the second quarter. The rate of inflation accelerated to the quickest in three months and was faster than the UK  average. Anecdotal evidence suggested that a combination of skill shortages and higher demand underpinned the latest increase in pay.
Contract pay continues to rise sharply in May
As has been the case in each month since September 2012, average hourly pay given to short-term workers increased during May. The latest rise was sharp overall, but the rate of inflation eased from April and was slightly slower than the UK average. According to panellists, low candidate supply and increased demand for workers contributed to the sustained rise in contract wages.

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
Permanent staff placements across the UK fell for the third month in a row during May. The rate of decline accelerated slightly from April and was modest overall. The latest fall was driven by contractions in three of the four monitored English regions, led by the Midlands. The North of England was the only area to record an expansion in permanent staff appointments, registering a marked increase overall.
At the same time, contract billings continued to rise across the UK, extending the current sequence of expansion to just over six years. That said, the rate of growth eased to the slowest seen over this period and was marginal overall. At the regional level, increases in the South of England and London helped to offset declines in the North of England and the Midlands.
Candidate availability
As has been the case in each month for just over six years, UK permanent labour supply deteriorated in May. The rate of reduction was the quickest for four months, driven by sharper contractions in London and the Midlands. Nonetheless, there were also marked declines in permanent staff availability in both the North and South of England.
Contract staff availability also continued to fall midway through the second quarter. Moreover, the rate of decrease accelerated to the quickest since February and was historically marked. Recruiters noted sharp declines in each of the four monitored English regions, with the Midlands and London recording the steepest rates of contraction.
Pay Pressures
Permanent starting salaries across the UK continued to increase in May, extending the current sequence of growth to just over seven years. The rate of inflation remained historically sharp, despite easing to the softest since April 2017. At the regional level, the steepest rise in permanent starting pay was registered in the North of England, while the weakest was seen in London.
Meanwhile, remuneration for contract staff across the UK rose at a faster pace than in April. The rate of inflation ticked up to the quickest for six months and was sharp overall. All four monitored English regions recorded faster increases in contract pay, bar the North 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

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.

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