Latest jobs data shows record low employer confidence and decline in immigration
The Recruitment and Employment Confederation (REC)’s latest monthly survey of hiring intentions, JobsOutlook, has shown a marked drop in employer confidence in the UK economy.
The survey of UK hirers revealed confidence in the UK economy’s prospects dropped 6 percent last month to a net -20: the lowest score on record in the three years since the industry association has been carrying out the survey of British businesses.
The drop in confidence in the economy now appears to be affecting respondents’ hiring decisions too: confidence in making hiring and investment decisions declined by 3 percentage points to a net +5. This is also at the lowest level ever since the survey started shortly after the EU referendum in June 2016.
The survey also found that:
- Forecast demand for permanent employees in the short-term fell by 4 percentage points to a net +17, and in the medium-term dropped by 6 percentage points to a net +25 – although these declines still represent a better position than at the same time last year.
- 50% of employers who hire permanent staff expressed concerns this quarter over availability of candidates, up 9 percent from the previous year. Of most concern were shortages in the Engineering & Technical sector, followed by Health & Social Care and Hospitality. These three sectors have been causing the most anxiety for the last five consecutive months.
- In the short-term, the balance of employer sentiment towards hiring temporary agency workers (including contractors) fell by 9 percentage points from last month to a net -6. The temp sector has benefited over the past 15 months as market uncertainty has made employers less likely to invest in permanent staff, and remained in positive territory since November 2017 – this month, however, it has returned to a negative position.
- In the medium-term, the balance of sentiment towards hiring temporary staff (incl. contractors) fell by 6% to a net of -7. This is again the lowest level since records began in June 2016, 10% lower than the same time last year, and the second consecutive month to carry a negative net score.
- The decline in demand for temporary staff has led to less concern over sourcing suitable workers: 25% of employers expressed concern over sufficient levels of talent in the temp sector, compared to 32% this time last year. The sectors expected to have the highest shortages are: Sales & Retail, Education and Engineering & Technical. The REC notes the lack of available temporary workers in Education, given that the academic year is “in full swing”.
- 82 per cent of UK employers have either little or no surplus workforce capacity, including 88 per cent of the UK’s largest (250+ employees) enterprises and 93 per cent of public sector bodies.
Along with the findings of their own survey, the REC has cited Office of National Statistics (ONS) figures showing a continued fall in EU migration as also being significant.
Neil Carberry, REC chief executive said: “With only a month before Britain is due to leave the EU, businesses across the country are clear that they need clarity about the plan for after the end of March. That must mean a smooth move to a Brexit deal – not a dangerous no deal experiment. A sensible approach will underpin strong growth in jobs, which UK employers have a record of delivering, including in the survey we publish today.”
“Recruiters are helping employers to find the staff they need – especially in key sectors of shortage, like engineering, healthcare and hospitality. But with employers’ confidence levels at a low point and hiring intentions for both permanent and temporary staff dropping in today’s survey, there can no longer be any argument – uncertainty is damaging for job creation.”
Commenting on the fall in EU migration, REC director of policy Tom Hadley said: “The fact that the number of people coming to the UK for work has fallen to the lowest levels since 2014 is concerning at a time when UK firms are already struggling to find candidates to fill vacancies in sectors as varied as technology, health and hospitality. Providing workers from the EU with clarity on what their future working opportunities and rights will look like is a huge priority.
“Brexit uncertainty, with a lack of clarity on what no deal means for EU citizens working here, coupled with a weak pound is making the UK less attractive to workers from the EU27. Our latest JobsOutlook data tells us that employers have little or no spare capacity which is why an evidence-based immigration strategy is essential. Taking no deal off the table is also a must in order to reassure workers as well as employers.”
The month-end statistics follow the REC’s Report on Jobs earlier in the month which reported a fall in permanent placements for the first time in two and half years and the slowest acceleration in the contract and temporary sector in the sector’s current six year period of continuous growth.
28th February 2019.
Sources:
https://www.recruiter.co.uk/news/2019/02/confidence-uk-economy-falls-jobsoutlook-low
