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KPMG and REC report indicates further surge in hiring activity across the South in September

By Karolina Skinner
11 October 2021
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The latest KPMG and REC UK report on jobs indicated a further surge in hiring activity across the region in September. Moreover, permanent 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. According to panel members, the latest increase in permanent staff appointments was driven by greater activity at clients and stronger demand for staff. 

At the regional level, the rise was broad-based and led by the North of England. The Midlands recorded the softest increase in permanent placements, albeit one that was still marked.

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. 

Across the four monitored English regions, the North of England registered the quickest rate of temp billings growth and was the only region to note an acceleration. 

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. 

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.

Commenting on the latest survey results, Will Smith, Partner for KPMG in the South East, said: "The record rate of permanent appointments during the last month clearly offers cause for optimism among businesses and jobseekers alike, as the South looks to leave the employment struggles of the pandemic behind. 

"It remains to be seen, of course, what impact the recent end of the furlough scheme will have on firms’ hiring intentions. And, following another month of declining worker availability, the region’s businesses will need to continue to show resilience until a balance between demand and supply is restored, hopefully sooner rather than later."

Neil Carberry, Chief Executive of the REC, said: "Demand for workers continued to grow last month, while staff availability fell at a near record pace. Competition for staff has led to the fastest growth in starting salaries since this survey began – not just in logistics and food processing, but in white collar professions as well. But we have all seen how labour shortages have affected our everyday lives over the past few weeks, whether that’s an empty petrol station or fewer goods on supermarket shelves.

"The scale of the shortages we are seeing cannot be explained by one factor alone, but are a major challenge to businesses’ ability to drive the prosperity of the UK in the months and years to come – supporting families and paying the taxes that fund public services. While the current crises will pass, rising input costs and further tax rises would only mean higher prices and lower investment in the medium term. It is essential that government works in partnership with business to deliver sustainable growth and rising wages, rather than a crisis-driven sugar rush. That includes working on policies that encourage business investment, an international outlook and skills development, especially at Levels 1 and 2 where shortages are most acute – this will also help unemployed young people get into work."

About KPMG

KPMG LLP operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded revenues of £2.3 billion in the year ended 30 September 2020. 

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world.

About REC

The REC is a recruitment and employment confederation.