Report on Jobs: London

Permanent placements down at sharpest rate since June 2009

Key points from March survey:
Permanent appointments and temp billings both fall during March
Demand for permanent staff rises, but availability worsens
Marked drop in starting salaries for permanent jobs contrasts with higher temp pay

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.

Placements of permanent staff down markedly
March saw a marked and accelerated decrease in permanent staff placements across the capital – the sharpest since June 2009. This contrasted with a further solid increase in the number of people placed in permanent jobs across the UK as a whole.

Temporary billings fall at slower rate
London’s recruitment consultancies registered a fifth straight monthly decrease in billings received from the employment temporary staff. However, the rate of decline eased since February, and was broadly in line with the UK-wide average.

Job vacancies
Latest data indicated a rise in the demand for permanent staff across London, ending a six-month sequence of decline. The overall increase in permanent vacancies was, however, only modest, and weaker than the UK average. Temporary vacancies within the capital meanwhile fell at the sharpest rate for over two-and-a-half years.

2 - Staff availability

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

Divergent trends in staff availability were signalled in March, with a fall in candidates available for permanent vacancies in London contrasting with another solid rise in temp availability.

Candidate numbers for permanent vacancies fall
The availability of candidates seeking permanent work in London decreased for the first time in four months in March. The overall decrease was moderate, and contrasted with a further (albeit much slower) increase in availability across the UK as a whole.

Growth of temp availability slows slightly
The number people available to fill temporary vacancies across London increased solidly during March, extending the current sequence of improvement to 19 months. That said, growth eased since the previous survey period to the slowest since August 2011. The availability of candidates for temp work at the UK level also increased at a slower rate, but comparatively faster than in the capital nonetheless.

Key permanent staff skills reported in short supply:*
Accounting/Financial: Niche finance skills.
Other: Languages
Key temp skills reported in short supply:*
None.

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
Latest data pointed to a second straight monthly fall in average starting salaries awarded to people taking up permanent roles across London. Furthermore, the rate of decline accelerated since the previous survey period to the sharpest since last October. At the UK level, starting salaries for permanent positions were broadly unchanged over the month.

Temp/contract pay rates
Hourly rates paid to temporary staff in London increased solidly during March, and at slightly faster rate than across the UK on average. Anecdotal evidence attributed this second consecutive monthly increase in temp pay in the capital to the impact of Agency Workers Regulations.

UK average weekly earnings
Data released by the ONS showed that UK average weekly earnings increased by 0.4% over the year to Q4 2011 to £544.
Weekly earnings increased fastest in the East Midlands, where pay grew by annual rate of 7.9% to £526. Workers in South East England meanwhile saw the sharpest decrease, with average earnings there falling by -4.1% on the year 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
London was again the only monitored region to see permanent staff placements fall in March, while temp billings across the capital decreased at a broadly similar rate to the UK average.
Appointments of permanent staff increased markedly in both the Midlands and the South of England in March. Elsewhere, the North of England saw a modest rise in permanent placements, and London a marked fall. Temp billings meanwhile fell across the UK on average, with only recruitment consultancies in the Midlands reporting a rise.

Candidate availability
A fall in the availability of permanent staff in London contrasted with a marginal increase across the UK as a whole. Temp availability across the capital meanwhile increased at a slightly slower rate than the UK-wide average.
Increases in candidates available for permanent vacancies in both the Midlands and the North of England were sufficient to offset a fall in London. The North of England meanwhile led a broad-based increase in the availability of temporary/contract staff.

Pay pressures
London saw the fastest rise in temp rates in March, but was the only region where starting salaries for permanent roles decreased during the month.
All monitored regions expect London registered rises in starting salaries for permanent staff, with the South of England seeing the fastest monthly increase overall. In contrast, recruitment consultancies in London reported the strongest growth in temp pay rates, followed by those located in the North of England.

Source: Markit

http://www.markit.com