'The Midlands is holding up better than elsewhere,' report on jobs in the Midlands reveals

The latest KPMG and REC, UK Report on Jobs: Midlands survey, compiled by S&P Global, showed the supply of candidates continued to rise markedly, though demand for permanent and short-term staff diverged. 

While permanent vacancies fell sharply, Midlands-based recruiters recorded a slight increase in temporary vacancies.

On the pay front, starting salaries rose solidly in September, though the increase remained slower than the historical average. At the same time, temp pay growth improved to a four-month high.

The report is compiled from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.

It found the number of people placed into permanent roles across the Midlands declined in September, marking the fourth decrease in as many months. Recruiters often linked the reduction to weaker confidence around the economic outlook, higher employment costs and falling vacancies. That said, the Midlands saw the softest decrease in permanent placements of all four monitored English regions in September.

Data for September indicated billings received from the employment of temporary staff increased for the second successive month. The respective seasonally adjusted index hit its highest reading since November 2024 and was consistent with a solid rate of growth overall. Recruiters mentioned stronger demand for short-term staff and new projects had helped to lift billings.

The Midlands and the North of England were the only monitored areas to see temp billings rise in September, with falls recorded elsewhere. Latest data pointed to a 16th successive monthly decrease in demand for permanent staff in the Midlands. Though sharp, the pace of reduction was the softest since June. Of the four monitored English regions, the Midlands saw the second-slowest fall in permanent vacancies, behind the North of England.

In contrast, temp vacancies rose for the second month running. The increase was marginal, but the most pronounced in three months. The Midlands was the only English region to see an improvement in temp staff demand.

Adjusted for seasonal factors, the Permanent Staff Availability Index signalled an increase in permanent candidate numbers in September. There were reports that redundancies and a drop in vacancies contributed to the uplift in staff supply. The rise in the Midlands was slightly softer than that seen across the UK as a whole. 

Temp staff availability across the Midlands rose again at the end of the third quarter, stretching the current run of growth to 29 months. Recruiters mentioned redundancies and weaker demand for temp staff had pushed up candidate numbers. Furthermore, the rate of expansion quickened from August and was the strongest since October 2020.

Recruiters across the Midlands continued to record an increase in starting salaries for permanent workers in September. Permanent pay has now risen for just over four-and-a-half years. Some panellists mentioned higher salaries were offered to attract suitably skilled staff. The rate of inflation eased from August, however, and, though solid, was slower than the long-run survey average.

Nevertheless, only the Midlands and London recorded increases in starting salaries in the latest survey period, with falls seen in the North and South of England.

Average hourly pay for short-term staff rose across the Midlands for the 10th consecutive month at the end of the third quarter. Where wages had increased, anecdotal evidence suggested this was often due to competition for highly-skilled staff. The rate of pay growth was the steepest seen since May, and  above the national average.

Kate Holt, people consulting partner at KPMG in the Midlands which is based in Birmingham, said: “Despite permanent hiring remaining underwhelming, the Midlands is holding up better than elsewhere, with the softest decline in placements across the UK. This reflects the resilience of businesses in the region, who continue to make cautious but considered workforce decisions.

“Meanwhile, the Midlands saw the strongest rise in temp billings in 10 months and was the only region to record growth in temp vacancies – a sign that employers are using flexible staffing to keep projects moving and adapt to change.

“Candidate availability is also on the rise, creating new opportunities for employers to access talent that might not have been available previously. While pay pressures are easing slightly, many businesses are still prepared to offer competitive salaries to secure skills essential to growth and team development.” 

Neil Carberry, REC chief executive, added: “Recruiters have been reporting a trend towards stabilisation in the permanent job market since the summer, and today’s data back that up for September. The temporary market remains somewhat healthier, with growth in some regions. We can hope that the jobs market and the economy may be moving towards calmer waters, but falling vacancies is a reminder that what is really needed is a shot of confidence in the wider economy to get things going.

“Pay trends remain subdued where pay is set by the market rather than the Government. This suggests that pay growth should not be a drag on the Bank of England’s upcoming interest rate decision.

“The economic picture is still challenging for employers, with pressures beyond their control. A genuinely pro-business, pro-growth Autumn Budget next month could provide much-needed relief, by avoiding unaffordable tax rises on business, committing to real practicality on the Employment Rights Bill, supporting flexible work and reforming public sector hiring.”