New data from the Recruitment and Employment Confederation (REC) shows that the number of employers intending to increase their temporary/contracting headcounts in August doubled year on year, amidst falling confidence in the economy due to persisting Brexit uncertainties.
The latest Jobs Outlook report showed that employer confidence in the economy entered negative territory in August, with the balance of respondents anticipating positive economic prospects compared to those anticipating negative developments falling by seven points from July’s total to -1.
Even so, the economic gloom was counterbalanced by robust confidence in continued hiring and investment decisions, with the net balance of those intending to carry on with these plans in their own business staying virtually steady at +15, a dip of just 1 point on last month’s total.
The small decline may have been prompted by continued concern over candidate availability in a context of exceptionally high employment rates. Half of the respondents reported concern over finding candidates to fill available permanent openings, with those seeking construction skills being especially worried.
Year on year, there were increases in the number of employers intending to hire more permanent staff in the near-term (26%, up eight points on the same time last year) and in the medium-term (27%, up nine points).
However, intentions to hire temporary/contracting staff were markedly stronger than the same time last year, at least doubling to 35% planning more temps/contractors in both the near-term and medium-term.
This has been accompanied by a near-doubling year on year in the percentage of employers fearing temp/contracting candidate shortages, surging from 34% in August 2017 to 66% now. The most significant challenges were anticipated by employers needing temporary marketing, media and creative staff and drivers.
Commenting on the findings, REC CEO Neil Carberry said that it was clear that uncertainty over the exact terms of Britain’s withdrawal from the EU was exerting a negative pressure on employer confidence about the economy. Yet, this appears to have had a limited impact on their own hiring intentions, which remained firmly within positive terrain.
Candidate shortages in multiple sectors of the economy, he said, were forcing employers to work harder to attract key personnel. Those reliant on drivers, especially in food supply, feared they would be badly hit by future changes to Britain’s capacity to deal with the EU.
He added: “UK business needs to know what the Brexit deal will look like soon. The EU summit at the end of June failed to answer many questions and concerns – clarity on our future trading relationship and a comprehensive mobility and migration deal with the EU will give employers the capacity to invest and create jobs.”