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KPMG/REC: Record increase in permanent staff appointments in September

By TBM Team
16 November 2021

The latest KPMG and REC, UK Report on Jobs: South of England survey indicated a further surge in hiring activity across the region in September. Moreover, permanent staff placements expanded at the quickest rate since the survey began in October 1997. Temp billings growth also remained sharp, despite easing since August.

At the same time, recruiters reported further substantial increases in vacancies as economic activity picked up further. However, candidate shortages remained severe, with staff supply falling at a near-record pace, driving unprecedented increases in both starting salaries and temp wages.

The KPMG and REC, UK Report on Jobs: South of England is compiled by IHS Markit from responses to questionnaires sent to around 150 recruitment and employment consultancies in the South of England.

Permanent placement growth hits fresh series high

Recruiters in the South of England signalled a seventh successive monthly increase in permanent placements during September. Notably, the rate of growth quickened since August to hit a fresh record high, but was slightly softer than the UK-wide average.

September survey data signalled a notably slower increase in billings received from the employment of short-term staff across the South of England. Though sharp and above the series trend, the rate of growth slipped to the weakest since March. Higher temp billings were frequently attributed to increased business requirements and efforts to fill vacancies. However, there were also reports of candidate shortages curbing overall growth.

Permanent staff vacancies in the South of England rose substantially in September, despite the rate of increase edging down to a four-month low. Growth of demand for permanent workers in the region was also slightly stronger than that seen at the national level.

Vacancies for temporary staff also expanded at a slower pace at the end of the third quarter. Though rapid overall, the latest upturn was the softest recorded since April.

Supply of permanent staff continues to fall rapidly

Adjusted for seasonal variation, the Permanent Staff Availability Index remained well below the neutral 50.0 level to signal a further severe drop in the supply of permanent workers across the South of England. Although easing from August's survey record, the rate of deterioration was the fourth-quickest in the series history and exceeded the national average.

Each of the four monitored English regions saw permanent staff supply fall in September, with the North and South of England recording the joint-sharpest reductions.

The supply of candidates for temporary roles in the South of England fell for the seventh straight month in September. The rate of decline remained historically sharp, despite easing from August's series record. Greater demand for staff, fewer EU workers and a general shortage of skills were all cited by recruiters in the latest survey period.

London-based recruiters saw the most marked reduction in temporary candidate availability, while the South of England recorded the softest fall of the monitored English regions.

Unprecedented increase in permanent starters' salaries

Recruitment consultancies based in the South of England signalled a further increase in salaries awarded to new permanent joiners in September. Notably, the rate of inflation quickened to a new series record for the third month running. The increase was also broadly in line with that seen across the UK as a whole. Greater competition for scarce workers and efforts to attract job applicants were key drivers of the latest increase in pay.

After slowing slightly in August, temp pay inflation quickened notably in September. Furthermore, the rate of increase was the sharpest ever seen in 24 years of data collection and outpaced the UK-wide trend. When explaining the latest upturn in temp pay, recruiters frequently mentioned shrinking candidate supply and rising demand for staff.

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