Significantly more employers plan to increase their use of contracting professionals and temporary agency workers compared to this time last year, amidst falling confidence in Britain’s economic prospects and fears of skills shortages, the latest JobsOutlook report from the Recruitment and Employment Confederation (REC) has found.

Employer confidence in the economy has been declining for some time now and fell further this month, with the balance of those holding a positive outlook rather than a negative view dropping to a net balance of -5, down 4 points from last month’s total and the lowest recorded since March this year.

However, although confidence in the economy is at its lowest in six months, this doesn’t seem to have dented employer confidence in proceeding with hiring and investment decisions. Both remained on positive turf with a net balance of +15, unchanged from August’s total.

Of those planning to appoint permanent staff, half (50%) reported concerns about finding enough suitably skilled candidates for these roles. Employers in engineering and tech expressed these concerns most acutely, while employers in health and social care and construction also anticipate severe skills shortages.

Three fifths (60%) of the respondents who planned to hire temporary agency workers and contracting professionals similarly expressed concerns over finding sufficiently skilled candidates in sufficient numbers, an increase of 36% year-on-year. Employers in the marketing, media and creative sector expected the most severe shortages, although those seeking drivers and construction workers also feared serious talent shortages.

Year-on-year, there was a 23% rise in the number of employers planning to hire short-term agency workers and contractors. For the medium term, the net balance of those planning temporary hires climbed to +19, a rise of +7 year-on-year.

Commenting on the latest findings, REC CEO Neil Carberry said that the continuing erosion of employer confidence was a stark reminder that time is running out on Britain’s Brexit negotiations with the European Union. British businesses will have to adapt to whatever deal emerges, he noted, and employers were already crafting contingency strategies for what a potential deal or no-deal scenario would bring.

Yet, the report shows remarkably robust hiring intentions in the midst of all this uncertainty, Carberry said, with recruiters working diligently to fill vacancies and assist future growth.

He added: “Employment is high and candidate availability tight. The coming months will show whether the plans to increase use of temporary staff we see today reflect the need for staff in a tight labour market or weakening employer confidence in the economy for 2019.”

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