London Labour Market 7th March 2012

The most up-to-date source of monthly labour market data and analysis

Report on Jobs: London

London sees staff appointments fall in February

Key points from January survey:
Placements fall in line with a decrease in demand for staff
Solid rise in temp pay rates contrasts with dip in permanent salaries
Availability of staff in the capital up at slower pace

1 - Staff appointments / Vacancies

Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.

Permanent placements dip slightly in February
After increasing in January for the first time in seven months, the number of people placed in permanent work by London’s recruitment agencies fell marginally in February. The UK as a whole meanwhile saw a solid rise in permanent placements that was the fastest in nine months.

Temp appointments fall again
Billings received by London recruitment consultancies from the employment of temporary/contract staff fell moderately in February, extending the current sequence of decline to four months. Meanwhile, UK-wide temp billings fell marginally since the previous survey period.

Job vacancies
London-based recruitment agencies reported a decrease in the demand for labour in February. Temporary vacancies fell at the faster pace, contracting at the sharpest rate in two-and-a-half years. The demand for permanent staff fell only marginally, and at a rate that was weaker than the average recorded throughout the current six-month spell of decline.

2 - Staff availability

Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month.

In line with the trends shown across the UK as a whole, London saw a robust improvement in the availability of temporary staff and a moderate rise in permanent staff availability.

Availability of permanent staff up moderately
The number of candidates available to fill permanent job vacancies in London rose for the third month in succession during February. The rate of improvement was nevertheless slower than January’s 26-month high, and moderate overall. Recruitment agencies across the UK as whole registered a similar increase in the availability of candidates for permanent jobs.

Solid rise in temp availability, albeit slowest for three months
The availability of candidates for temporary vacancies in London improved markedly during February, with more than 25% of recruitment consultancies in the capital reporting better availability compared with the previous survey period. That said, the rate of improvement was the weakest for three months, and again below the UK average.

3 - Pay pressures

The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.

Permanent salaries
After remaining unchanged in the previous two months, average starting salaries awarded to staff placed in permanent positions in London fell moderately during February. According to anecdotal evidence, this partly reflected a drop in the number of senior roles filled during the month.

Temp/contract pay rates
In contrast to the trend in starting salaries for permanent roles, hourly rates paid to temporary/contract staff increased in February for the first time in four months. Around 14% of panellists registered a rise in temp wages compared with the previous survey period, and predominantly associated this with the impact of Agency Worker Regulations.

UK average weekly earnings
Latest data from the Office for National Statistics showed that average weekly earnings across the UK grew at annual rate of 0.4% in the fourth quarter of 2011.

Pay growth was strongest in the East Midlands, where average weekly earnings increased by 7.9% to £526 in the year to Q4 2011. Workers in the South East saw pay fall at the fastest rate over the same 12-month period, with earnings decreasing by 4.1% to £585.

4 - Regional comparisons

The Report on Jobs: London is one of four regional reports tracking labour market trends across England. Data are also available for the South of England, the Midlands and the North of England.

Staff appointments
Permanent staff appointments in London fell in February, contrasting with a solid increase at the UK level. London meanwhile saw a faster decrease in temp billings than the UK average.
London was the only monitored region to see a fall in appointments of permanent staff, with marked increases recorded in the Midlands, the North and the South of England. Temp billings meanwhile fell throughout England, decreasing fastest overall in London.

Candidate availability
The availability of staff for both permanent and temporary roles in London improved in February, albeit at slightly weaker rates than across the UK as a whole.
Data showed that the availability of both permanent and temporary staff rose fastest overall in the North of England. Recruitment consultancies in the Midlands and the South of England meanwhile recorded the weakest improvements in permanent and temporary staff availability respectively.

Pay pressures
Pay pressures in London broadly matched those seen across the UK as a whole, with a fall in starting salaries for permanent workers contrasting with growth of temp hourly rates.
Permanent starting salaries across the UK fell slightly in February, as rises in the Midlands and the South of England were offset by declines in both London and the North of England. In contrast, there was a broad-based increase in temps’ hourly rates, with short-term staff in the Midlands (by some distance) seeing the strongest monthly rise in wages.

Source: Markit

http://www.markit.com