According to the latest report, while employer confidence in the UK economy rose to a net figure of -31 in October-December 2019, two percentage points higher than the previous rolling quarter, confidence in making hiring and investment decisions also improved, rising 4% to net -3.

The report reveals confidence levels in December were significantly higher than the previous two months – business confidence in the economy and in hiring rose to -26 and +9 respectively.

However, despite rising levels of confidence levels, hirers remain worried about skills shortages, with almost half (49%) of employers expecting find to find a shortage of workers for permanent roles. Employers of permanent staff were most concerned about sectors like construction, health and social care, which they fear will be affected by the government’s plans for a more restrictive immigration policy.

Other key findings from the report include:

• Forecast demand for permanent staff remained firmly in positive territory, sitting at +21 in the short term and +26 in the medium term.
• Demand for temporary agency workers also rebounded this quarter. Short-term demand rose by nine percentage points to +9, while demand rose by four points to +3 in the medium term.
• The proportion of employers of temporary agency workers who said that these workers are important for managing fast-changing organisational requirements rose from 53% to 68% year-on-year.
• Three in four (76%) employers of temporary agency workers said that it is important that the recruitment agency provides management information as a service, up from 58% a year earlier.

REC CEO Neil Carberry said: “Greater clarity about the future means that businesses are less likely to sit on their hands when it comes to hiring in early 2020. ‘JobsOutlook’ clearly reflects the feedback we have been getting from recruiters across the UK, showing hirers have been more ready to take action from December on. 

“Making sure that this swing in confidence persists will require a good deal with the EU that addresses services as well as goods. Given the candidate shortages many firms are experiencing, we will also need progress on effective skills and immigration policies. A reformed apprenticeship levy and a managed immigration policy must work for the whole economy – and include a temporary work route to meet the need for workers in crucial services and industries.”

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