No surprise hiring sentiment is down, reveals JobsOutlook survey

Plummeting hiring confidence among employers is no surprise, according to the CEO of the Recruitment & Employment Confederation.

Thanks to a year of falling business investment and weeks of Brexit inertia, findings from the REC’s latest JobsOutlook survey reveal confidence in economic prospects for the UK have dropped again, by eight percentage points from the previous month to net -28. 

The figure is the lowest level since the survey began measuring sentiment about the economy among Britain’s businesses, and is 54 percentage points down on June 2016 when the UK voted to leave the EU.

However, the findings also show more employers planned to increase over cutting permanent headcount in the short term, at net +17. Over the medium term, forecasts for permanent hiring were down three percentage points this month but were still in positive territory at net +22.

Commenting on the findings, REC CEO Neil Carberry said: “A year of falling business investment and weeks of Brexit inertia mean no one should be surprised that employers’ confidence in hiring for their own business is now dropping. For months, businesses have told us that they were concerned about the general outlook for the economy – it is clear to us that this concern is now closer to home. Lower use of temporary labour is a sign of lower demand.

“But our jobs market is robust. Even now, recruiters are finding people new jobs and helping companies to compete. The fact that permanent hiring plans are still positive is a sign that the economy will deliver, if the fog of uncertainty is lifted from British business.

“The extension to the Brexit deadline gives us some space to find a pragmatic deal that will give the UK’s businesses the certainty they need to invest and create jobs. And it avoids a no deal, which the majority of recruiters – in line with the majority of all British businesses – see as deeply problematic for the economy and the jobs market.

“But we cannot delay forever. It is in politicians’ power to make the weaker data we see today a blip. Our labour market is strong. Giving firms certainty about a future deal that supports trade, jobs and investment would get the UK back on track.”

Other key statistics from this month’s survey include:

  • Almost half (49%) of UK employers raised concerns about the availability of permanent-hire candidates, with a lack of engineering & technical and health & social care workers of most concern.
  • At net -7, the balance of sentiment for hiring agency workers in the short term was 13 percentage points lower than a year earlier. Sentiment in the medium term was 21 points lower than last year, at net -8.
  • Following this quarter’s decline in expected demand for temporary workers, 35% of employers planning to hire temporary workers raised concern over the sufficient number of agency workers with the necessary skills they require – the same proportion as a year earlier. Employers are expecting the most severe skills shortages in construction, followed by education and driving.
  • Four in five employers (82%) had either no surplus workforce capacity, or such a small amount that they may need to recruit additional staff if demand increased.

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