By Brian Stahelin, joint managing director at Huddersfield-based Stafflex

The latest employment data for Yorkshire & Humber shows positive signs with an increase in permanent placements.

And although we have seen an increase in salaries across both permanent and temporary, it is inflation which is still the big concern having risen to a 40-year high of 10.1% in July.

Euan West, senior partner at KPMG in Leeds, said: “There was a real slump in permanent placements at the start of the summer, which was a worrying sign of economic uncertainty and inflation sapping the confidence of employers.

“But, the picture across the North has steadied somewhat with a modest recovery in appointments as we head into the second half of the year.”

Staff appointments

The stagnation in permanent placements has eased somewhat as there are signs of a moderate recovery throughout July.

Katie Shoesmith, deputy CEO of the Recruitment and Employment Confederation (REC), said: “Growth in permanent hiring has softened in recent months. We’ve seen that rising fuel and energy prices, inflation and labour shortages are impacting employer confidence.

“Labour and skills shortages are also restricting opportunities for both the private and public sector to meet consumer demand.”

Temporary placements growth has slowed but is still above the average. We are seeing a clear preference amongst companies to employ fixed-term workers rather than permanent staff as there is a reluctance to commit to expanding their headcount during this uncertain time.

Pay pressures and inflation

Starting salaries for permanent new staff saw an increase in the latest data – having said that the rate of increase was slower than anything we saw during the second half of 2021.

Higher starting pay was reportedly offered to entice suitably-skilled candidates and fend off fierce competition for staff. Temporary worker wages continue to rise in line with current market rates.

Inflation continues to be a huge issue as it hit a 40-year high of 9.4% in June. Industry experts and economists believe that an exodus of over 50s who left the workforce during the pandemic are fuelling wage inflation as the number of “economically inactive” people – those without a job and not seeking to work – is higher than before Covid struck, according to the Office for National Statistics.

Chairwoman of the John Lewis Partnership, Dame Sharon White, said: “Regardless of what has happened coming out of Covid, if the labour market is tight, if we continue to have far fewer people in work and looking for work – you’ve inevitably got more inflation and more wage inflation.”

Job vacancies

Vacancies for permanent roles saw a notable increase even surpassing their historical averages by a noticeable amount. Temporary vacancies also rose but at a slower rate than the last 12 months.

The ONS reported that vacancies hit an all-time high in April this year with 1.3 million across the UK.

Demand for skills

Not much has changed from our last Jobs Outlook in terms of the skills in demand. Almost all sectors are struggling in some capacity to recruit suitable workers in their respective areas.

The data highlighted accounting/financial, manufacturing (production, FLT, warehouse, welders in particular), business development and marketing, IT, administrators and customer service staff as key areas with shortages.