In a sign that the jobs market is picking up for the first time since the Covid-19 pandemic took hold earlier in the year, UK companies have reported that their ability to make hiring and investment decisions is now improving for the first time since February as the country gradually moves out of lockdown and into the “new normal”.
The monthly JobsOutlook survey of UK employers involved in hiring by the Recruitment and Employment Confederation (REC) found that employers’ confidence in making hiring and investment decisions rose to a net level of +4 in the first half of July, up thirteen percentage points from a level of net -9 in June, indicating that companies think the outlook has improved compared to the previous month.
This adds to positive news from the REC’s Jobs Recovery Tracker, launched earlier this month to track the how the labour market is recovering from the coronavirus crisis, which found that the total number of UK job postings had risen to 1.05 million in the week to July 12, up from 990,000 in the last week of June.
The JobsOutlook survey also revealed that businesses’ hiring intentions improved in July compared to the previous month, with forecast demand for staff in the short term, defined as over the next three months, rising to net +14, up from net +6 in early June. Medium-term demand for staff, defined as over the next four to twelve months, remained static at net +15.
Business confidence in the economy remains low, however, with confidence levels at net -40, although levels have been rising month-on-month since the record lows of net -62 seen in April and May. Redundancies are on the rise, with one in six (seventeen per cent) of employers making redundancies in the year to July 2020, up from nine per cent in the year to June, as businesses being the restructuring process in response to the impact of the pandemic on the economy.
“It’s good to see employer confidence rising as the lockdown measures ease,” said Neil Carberry, chief executive of the REC. “At this stage we would expect things to be getting better month-by-month. Even at times like these, there are always opportunities out there for jobseekers. But businesses are still very worried about the overall outlook for the economy, and while some are hiring, many are having to make tough decisions around laying people off.
“It’s too early to tell how quickly the economy will recover, but there are steps the government can take to keep firms hiring and boost growth – including a more flexible skills system and a reduction in the government’s payroll tax, National Insurance, to reduce the cost of hiring. Equally, it’s vital that we secure a good Brexit trade deal and deliver a workable immigration system on time to build up confidence and business investment here in the UK.”
27th July 2020.