Economic uncertainties are undermining hiring decisions among British employers, the latest JobsOutlook survey from the Recruitment and Employment Confederation (REC) suggests.

Just over a third of employers (34%) reported being “unsure” about their short-term hiring plans in the next three months for flexible staff, while almost the same number (32%) are unsure about their longer-term plans in the coming year for this category of worker. The number of employers responding “don’t know” for permanent hires in the medium term (four to 12 months) has almost halved year-on-year, tumbling from 18% in February 2017 to 10% now.

This month’s survey, which like its forerunners polled 600 employers of all sizes across the UK in both the private and the public sector, found that over a third of decision-makers (35%) believe that economic conditions in Britain are deteriorating. Only a fifth (21%) believed they are getting better. The study also found that overall confidence in hiring and investment decisions has dropped to its lowest level since the EU referendum, with a net balance of just eight.

Other findings include:

  • Economic uncertainty is affecting larger employers (i.e., those with over 250 employees) most adversely, with nearly half (47%) giving a reply of “unsure” to the question of whether they will expand or shrink their total of temporary or contracting workers over the coming three months. This has climbed from the 40% giving this response last month and is substantially greater than the mere 18% recorded this time last year.
  • Just 18% of decision-makers intend to grow their permanent headcounts over the next four to 12 months, a fall of five percentage points on the 23% total recorded in February last year.
  • The proportion of hirers planning to expand their temp/contracting workforce in the medium term has plunged from the 17% recorded at this time last year to 11% now.

Noting that employment had been on the increase over the last year, REC CEO Kevin Green pointed to an emerging hesitancy among British businesses, which he said may suggest that current political and economic uncertainties had adversely affected employer confidence. He added:

“Instead of thinking ahead, businesses are likely to make more ad-hoc decisions about recruitment. The shrinking number of candidates doesn’t help with this as employers continue to struggle with labour and skills shortages.

“We’ve now got a year left before Brexit happens and we still don’t know what this means for employers or EU staff in the country. Businesses need clarity in order to feel confident about the UK’s economic conditions. The government needs to get rid of this huge question mark and instead ensure that businesses and our successful labour market are supported.”

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