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Langley James IT Recruitment Market Review – the North – November 2018

December 7, 2018 . 9:00 am

Key findings from the November survey:
– Slower growth of permanent placements and contract billings
– Faster decline in labour supply
– Pay pressures remain historically elevated

Commenting on the latest survey results, Chris Hearld, Northern Regional Chairman at KPMG UK said:
“Amidst the political noise, Northern businesses are largely unfazed in their bid to recruit and make new hires, which is a really positive indicator of the underlying health of the regional economy. That appetite shows the resilience of our local management teams to see through this period of uncertainty and reveals a determination to make the most of the growth opportunities that arise. We expect some of the tightness in the job market to relent as trading conditions become clearer and candidates feel more confident to consider new roles.”

Recruitment & Employment Confederation Chief Executive Neil Carberry said:
“Today’s report backs up what recruiters across the country are saying to us. Fewer people are willing to change employer and look for jobs in this uncertain climate, despite rising pay and jobs being available. Sectors like hospitality and warehousing are facing particular challenges in the run-up to Christmas.”

Staff Appointments

Permanent placements expand at joint-softest rate since April 2013
Permanent staff appointments in the North of England increased at the joint-slowest rate in the current 67-month sequence of growth in November, on a par with July 2016. Notably, the rise in placements was only marginal
overall. Recruiters reporting a higher number of appointments commented on strong demand for staff. Meanwhile, some panellists mentioned that hiring plans were dampened due to concerns surrounding Brexit and low candidate availability. 
Contract billings growth falls to seven-month low
Following a sharp increase in October, contract billings growth in the North of England lost momentum in November. Moreover, the latest expansion was only moderate overall and the weakest since April. A number of survey respondents noted robust demand for staff when reporting a rise in contract billings.
Job Vacancies
November survey data pointed to a further rise in demand for permanent staff in the North of England. However, while the number of vacancies rose sharply, growth was softer than at the start of the fourth quarter. Vacancies for contract workers also increased markedly during November. The latest rise was stronger than the UK average, despite growth of demand easing compared to October.

Staff Availability

Permanent staff availability declines at sharper rate
The decline in permanent staff availability persisted in November, extending the current run of contraction to 70 months. Moreover, the rate of reduction accelerated to the fastest seen in three months. Recruiters commented on a lack of quality candidates and that workers were hesitant to change jobs amid Brexit uncertainty.
Contract labour supply falls markedly in November
The availability of contract workers also fell at the steepest rate since August in November, following a second successive acceleration in the pace of decline. The latest contraction was sharp overall, albeit the softest recorded across the four covered English regions. Recruiters attributed November’s decline to a lack of skilled workers as a result of high employment.

Pay Pressures

Starting salary growth remains robust
Permanent starting salary inflation in the North of England eased during November. That said, the rate of growth was robust overall and remained historically marked. Panellists continued to link higher starting salaries to labour market tightness and greater competition for workers.
Sharper rise in contract wages
Remuneration for contract staff rose sharply midway through the fourth quarter, with wages increasing at the fastest rate since July. That said, the pace of inflation was slower than the UK average, as has been the case for the past three months.
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 placements continued to rise markedly across the UK in November. However, the rate of expansion was the slowest since July and the second-weakest recorded in 2018 so far. The softer performance was driven by slower increases in the North and South of England, with the former recording only a marginal upturn that was the joint-softest since April 2013. After expanding at the quickest rate for five months in October, the rate of growth in contract billings eased during November. Though still sharp overall, it was the joint-weakest increase seen for just over two years (on a par with August 2018). All four monitored English regions reported softer growth in contract billings compared to October.
Candidate availability
At the UK level, permanent staff availability fell for the sixty seventh month in a row during November. Rates of contraction remained sharp in all four covered English regions. That said, the overall pace of decline was the softest since March, with both London and the South of England registering slower falls compared to October. Contract labour supply also contracted at a slower pace in November, registering the softest decline for three months. However, the drop was still historically marked and sharp overall. At the regional level, the quickest fall was recorded in the Midlands, and the slowest in the North of England.
Pay Pressures
November data pointed to a further sharp rise in starting salaries for permanent staff in the UK. This was despite the rate of growth easing to a three-month low. Faster rises in London and the South of England contrasted with slower increases in the Midlands and the North of England. Contract pay rates across the UK increased at the fastest pace since July 2007. Stronger rates of wage inflation were seen in three of the four monitored English regions, with the steepest rise seen in the South of England. London was the only location to report slower growth. However, the deceleration was fractional, and the increase still sharp overall.

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

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.