Employers turn to temps as Brexit uncertainty rises

Pessimism about the economic prospects for the UK economy has led to a dramatic increase in the number of employers turning to temporary agency labour.

According to the latest ‘JobsOutlook’ survey from the Recruitment & Employment Confederation, April’s data reveals the balance of sentiment for hiring agency workers in the short term was 10 percentage points higher than the previous month at net +3. Sentiment in the medium term was at net +1, up 9 percentage points from the previous month’s report.

However, the findings also show employers’ confidence in economic prospects for the UK dropping once again, by 3 percentage points from last month to net -31 – the lowest level since JobsOutlook began measuring sentiment about the economy among Britain’s businesses. This is 57 percentage points down on June 2016.

In contrast, employers’ confidence in making hiring and investment decisions in their own businesses remained significantly higher, at net -4 – a fall of 3 percentage points from the previous month, the second successive month that this measure has been in negative territory.

Commenting on the figures, REC CEO Neil Carberry said: “These figures emphasise again how Britain’s fantastic jobs market supports prosperity, given an uncertain economic outlook and lower business investment.

“The more positive figures on hiring for temporary workers suggest that many businesses are turning to agency work to help them navigate the unpredictability they currently face … In the long run, however, employment will be best supported by the stability a clear Brexit outcome will bring. It’s time to get on with delivering this.

“The delay to Brexit has given firms breathing space, and anecdotes from recruiters suggest that the jobs market has improved in the past few weeks. Building on this trend needs a deal – but it also needs action to address key staff shortages in some sectors. Employers are leading the way in addressing this, with the survey showing increasing activity on both training and inclusion. But government can help this process by reforming the apprenticeship levy into something that benefits all workers, through a flexible training levy approach.”

Other highlighted statistics from this month’s JobsOutlook include:

  • 34% of employers planning to hire temporary workers expressed concern over the sufficient number of agency workers with the necessary skills they require.
  • More employers planned to increase, rather than decrease, their permanent headcount in the short-term, at net +16. Over the medium-term, forecasts for permanent hiring remained positive at net +19.
  • Almost half (46%) of UK employers raised concern about the availability of permanent-hire candidates, with a lack of engineering & technical and health & social care workers continuing to cause most concern.
  • Four in five employers surveyed in March 2019 had either no surplus workforce capacity, or such a small amount that they may need to hire more staff if demand increased.
  • The same number plan to offer training and upskilling opportunities to their staff in 2019 to increase the productivity of their business.
  • Seven in 10 employers surveyed in March plan to actively promote inclusion and diversity, while 58% aim to offer more flexible working practices in an effort to increase productivity.

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