Despite plummeting confidence over prospects for the economy amongst British employers, their confidence about proceeding with investment and hiring decisions for both permanent and temporary/contracting staff remained in positive territory this month, the latest JobsOutlook survey from the Recruitment and Employment Confederation (REC) reveals.
Between September and October 2018, the net balance of employers adopting a positive outlook for the UK economy plunged by 9% to -14, the lowest since February this year.
Even so, confidence about investments and hiring decisions in their own firms remained stable and firmly positive for the third successive month in a row, remaining at a steady +15.
However, almost half of the employers polled (46%) who intend to hire temporary/contracting staff over the coming quarter reported concerns over finding enough short-term workers possessing the requisite skills. This a significant year-on-year rise of 39% in the number expressing concern of this kind. The most serious skills shortages are expected for drivers, although similar concerns emerged in the marketing, media and creative, and industrial sectors.
The same proportion reported concerns over sourcing candidates for permanent roles. The deepest anxiety over candidate availability was expressed by employers in health and social care, but hirers in engineering and technical, and hospitality also anticipate serious skills shortages.
Year-on-year, there was a substantial increase of 25% in the number of decision-makers intending to hire temporary/contracting staff in the short-term, taking the net balance to +16. The net balance for hirers planning to appoint temps and contractors in the medium term was also buoyant, climbing year-on-year by 14%.
Commenting, REC CEO Neil Carberry sounded a cautious note, saying: “With employers’ confidence in the prospects for UK economic growth diminishing, we need a Budget next week that gives businesses the support they need to drive the economy. Getting the tax system right is a priority, but hasty changes to contractor tax with Brexit on the horizon will lead to further stress on UK businesses – especially as the Chancellor’s experiment with this in the public sector is yielding mixed results.”
He urged the Government to prioritise the completion of the employment status review and the restructuring of the apprenticeship levy to turn it into an effective skills policy and not merely a tax. If both are conducted correctly, he said, they will help support job creation in the UK’s flexible labour market at a time of change when flexibility will become of even greater importance.
British businesses, he concluded, are continuing to drive growth by enlarging their workforces even while they make contingency plans for what a deal or no deal Brexit outcome may bring.