Brexit still dampening employer confidence despite hiring demands

Employer confidence in the UK economy remains low amid continued Brexit uncertainty.

According to the latest JobsOutlook report from the Recruitment & Employment Confederation, the findings reveal employer confidence levels are now at net -26, a fall of 1 percentage point from the previous rolling quarter.

However, employers are still looking to hire. Forecast demand for permanent staff increased to +19 in the short term and +21 in the medium term in May-July 2019, compared to the +16 and +18 recorded in the previous quarter (February-April 2019).

Almost half (46%) of employers of permanent staff raised concerns about finding enough suitable candidates for hire, with health & social care skills identified as the area they were most concerned about being able to access, while 45% of public sector employers reported having no spare workforce capacity at all.

Tom Hadley, director of policy and campaigns at the REC, said: “Our flexible labour market continues to be one of the strongest elements of the UK economy. This most recent survey shows employers are still looking to take on both permanent and temporary workers as they seek to maintain stability amidst the Brexit uncertainty. More employers also seem to be trying to transfer their best temps into permanent roles as candidate shortages continue to bite across many sectors.

“These skills shortages are especially acute in sectors like health & social care. With over 100,000 vacancies in the NHS and staff already working at full capacity, the government’s recent announcement on ending freedom of movement has come at the worst possible time … It is essential that the government has in place a sensible transition towards an evidence-based immigration policy to help reassure employers and EU citizens.”

Other key points from the report include:

  • Short-term forecast demand for temporary agency workers also increased from +2 in February-April 2019 to +5 this quarter (May-July). Demand was much higher among SMEs than large organisations.
  • Almost eight in 10 (77%) employers highlighted that they have little or no surplus capacity in their workforce this quarter. That includes 45% of public sector employers who reported having no spare capacity at all.
  • The proportion of employers of temporary workers transferring at least half of them into permanent posts each year increased from 15% in May-July 2018 to 23% in the same time period this year.

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