The latest Recruitment and Employment Confederation JobsOutlook survey of the hiring intentions of 602 UK employers has found that business confidence has fallen in the aftermath of the EU referendum. Even so, employers also report that if their businesses are to keep up with demand, they will need to appoint more staff.

Thirty-four per cent of employers polled in the three months to August 2016 said that they had zero capacity to absorb more work without expanding staff headcounts, while 43 per cent reported that they had only “a little” capacity left and would need to expand their workforce to manage any rise in demand.

Over a fifth of businesses (22 per cent) said that they intend to hire more permanent staff in the coming three months, while just four per cent anticipate having to pare back their permanent headcounts.

The survey also shows:

  • Twenty-five per cent of hirers plan to add more permanent staff to their workforces in the medium term (four to 12 months).
  • Vacancies in tech, engineering, construction and health and social care emerged as the most difficult to fill because of skills shortages.
  • Just over a quarter (27 per cent) of public sector employers have been forced to make redundancies over the last 12 months. In the private sector, 16 per cent have done so,

The survey also reveals a substantial increase in the number of employers who believe that economic conditions are worsening. Just 13 per cent expressed this sentiment in June. By July, this had risen to 22 per cent, and in August, it leapt to 34 per cent.

REC CEO Kevin Green applauded the strong attitude of consumers to continue as usual in the wake of the referendum result, which demonstrated demand on businesses remaining buoyant. This is reflected in employers’ plans to grow their workforces in the months ahead.

He went on: “This is good news, but there are question marks around the sustainability of positive trends we have seen since the referendum. Skills shortages are a major problem in many sectors, one that will only get worse if the supply of skilled EU workers is in any way curtailed. Employer confidence has fallen significantly, suggesting that while businesses continue to perform well, there is much anxiety about what the future holds.”

Previous REC surveys (the monthly Report on Jobs as well as the JobsOutlook) have suggested that employers are managing the uncertainties arising from the Brexit vote by hiring Umbrella Company Employees and other contracting professionals to manage demand, putting decisions on permanent hires on hold.

Green called on the Government to allay business concerns with a fiscal stimulus in the Chancellor’s Autumn Statement and to devise an immigration policy that would help businesses thrive.

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