More than nine in 10 (95%) of firms expect to increase or maintain permanent headcount in the next three months, according to the latest Recruitment & Employment Confederation’s Jobs Outlook.

The outlook reveals that 21% predict they would be adding to their headcounts during the year, 74% plan to keep their workforce numbers static and just 5% expect to decrease numbers.

Meanwhile, 32% of employers plan to grow their agency workforce over the next 12 months, while just under one in five intend to increase their temporary staff within the next three months.

Roger Tweedy, the REC’s director of research, says: “It is encouraging to see that employers are setting great store in building flexibility into their workforces for the short and long term while the economy remains in such a fragile state. Over the coming year, temporary work will continue to provide an important route back into the labour market.

“Though the labour market does show signs of stabilising, the first three months of this year could see a few jitters, which is why the majority of employers are planning to keep their permanent workforce static. The public sector squeeze, together with the increase in VAT and slowing economic growth means that this caution is understandable – in fact, we may have expected businesses to be more cautious about hiring in the short term.”