FOUR in 10 (40%) directors in the Midlands anticipate the creation of new, permanent roles in the second half of the year - up 16 points from 24% six months ago, according to the latest Robert Half Professional Hiring Index.

More than half (55%) anticipate maintaining headcount levels by filling vacated positions when they arise.

Across the UK, one in three (33%) directors plan to increase their permanent headcount, up nine points from 24% six months ago. Fifty-six per cent will replace vacating staff, thereby maintaining levels, up six points from 50% in January. Only two per cent plan to reduce headcount before the end of the year.

More than nine in 10 (92%) UK directors cite recruitment challenges and while the ability to find skilled professionals is uniform across the regions, the proportion of directors reporting that it is “very challenging” to identify the right people is slightly higher in London and the South East (31%) than in the Midlands and in the South West and Wales (both 30%) and the North and Scotland (21%).

Additional hiring in the Midlands is the result of several factors, with nearly seven in 10 (67%) citing new projects and initiatives when senior directors were asked their top three reasons for increasing headcount.

That was followed by product or service expansion (52%) and new market penetration (48%).

Optimism in the business climate is on the rise, with more than seven in 10 (72%) UK directors expressing confidence in the UK’s domestic growth prospects, up eight points from the beginning of the year.

Midlands directors are also optimistic, with seven in 10 (70%) expressing confidence in the UK’s growth prospects in the coming 12 months, up from 62% in January. That is tied with executive optimism in the South West and Wales, although lags slightly behind the 78% of London directors with a positive outlook.

Looking at their own companyies’ projections, more than eight in 10 (84%) UK directors are confident - up from 77% in January - suggesting a firm’s own combination of strategies, leadership and procedures can offset other macroeconomic factors.

Midlands directors are slightly more upbeat, with nearly nine in 10 (86%) executives - tied with London and the South East - expressing optimism. That compares to 82% in the North and Scotland and 79% in the South West and Wales.

Phil Sheridan, managing director UK, Robert Half, said: “The employment market for professional occupations continues to gain momentum, with companies hiring to fill vacated roles while also creating new ones.

“Hiring plans in the Midlands are outpacing the other regions in new job creation and executives are optimistic about the remainder of 2013.

“Many companies that may have put new initiatives or expansion plans on the backburner are again taking advantage of the stronger business outlook and are hiring permanent staff to handle key growth initiatives.

“As the job market improves, companies are finding that the pool of highly skilled talent is shrinking and the large majority is citing challenges sourcing the requisite talent and keeping them on board.

“While remuneration continues to be an attractive incentive, companies should also look at other valued benefits, such as flexible working, tuition reimbursement and initiatives to improve work-life balance.

“Many companies are adopting flexible benefits packages to tailor perks to individual preferences.”

Finance and accounting recruitment continues to outpace the average, with one in three (34%) chief finance officers planning to expand their permanent headcount, up from 28% in the first half of the year.

More than half (55%) will be maintaining levels and only two per cent anticipate employee reductions before the end of the year.

Nearly nine in 10 (87%) find it challenging to find skilled financial professionals today, with the most challenging areas including accounting, business/financial analysis, financial management/control and compliance. As a result, nearly eight in 10 (79%) are concerned about losing key staff.

The financial services sector will lead the way in job growth ahead of other professional occupations, finds the Index. Nearly four in 10 (39%) executives anticipate staff augmentations, up eight points from 31% six months ago.

The areas of demand include accounting and finance (72%), operational support (69%), risk (33%), revenue-generating (31%) and compliance (23%).

Nearly all (99%) express challenges in finding skilled professionals, indicating that talent shortages exist despite media reports about the sector and it is, therefore, not surprising that 95% are concerned about retaining their top performers.

To entice existing employees to stay, nearly half (46%) will be increasing salaries and one in four (25%) will increase bonuses.

Job creation across other professional occupations is also trending upwards, with nearly three in 10 (29%) anticipating additional hiring, up from 22% six months ago.

Nearly six in 10 (59%) directors expect to maintain current levels by backfilling vacated roles and only three per cent plan to reduce headcount.

Recruitment challenges persist, with nine in 10 (93%) expressing difficulty sourcing the requisite talent and 84% are concerned about losing key staff.

More than three in 10 (34%) plan to increase salaries and one in five (19%) will be raising bonuses.