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Employers remain cautious amid political uncertainty

New data from the Recruitment & Employment Confederation (REC) shows that businesses continue to be cautious about hiring and investing due to the current political uncertainty. This is despite the fact that employer confidence had been starting to show signs of improvement since the extension to the Brexit deadline.

The REC’s latest JobsOutlook report shows that employers’ confidence in making hiring and investment decisions remained static at net: +1 this quarter. Meanwhile, their confidence in the UK economy improved slightly from the previous rolling quarter, rising by just 1 percentage point. It remained firmly in negative territory at net: -25.

The survey also found that hiring intentions remained stable in April-June 2019 compared to January-March 2019. Employers’ sentiment about hiring in the short-term increased by just 1 percentage point for permanent staff, and by 2 percentage points for temporary agency workers, compared to three months earlier (from net: +16 to net: 17, and from net: +3 to net: +5, respectively).

Neil Carberry, Chief Executive of the REC, said:

“Headline jobs numbers remain positive, but our data shows that the business community is cautious about hiring in the current environment. While employers still believe in their own business, wider concerns about the economic outlook are leading to this more moderate approach.

“The challenge for the new Prime Minister is to find a clear, realistic and effective path to boosting business confidence. This must start with a negotiated Brexit deal which allows access to the skills and markets that the UK relies on – not a sudden shock. Protecting our flexible jobs market will also be vital, as it underpins so much of our high employment rate.

“It is in uncertain times such as these when recruiters can really show their worth as trusted advisers to business. Their knowledge and expertise is invaluable in helping employers hire the right staff. The REC will be helping members to do this with even more knowledge through our new regional market insights launching next week.”

Other key figures from the latest JobsOutlook include:

  • Four in five (78 per cent) UK employers have either little or no surplus workforce capacity, including 46 per cent of public sector hirers having no surplus capacity (up from 38 per cent a year earlier.
  • 42 per cent of employers of permanent staff expressed concern about the sufficient availability of appropriate candidates for hire. Health & Social Care, Hospitality and Construction were the skills areas of most concern.
  • 92 per cent of employers who recruit temporary agency workers highlighted the importance of a recruitment agency’s geographical and/or skills expertise when selecting their agency partners – up from 70 per cent year-on-year.
  • At 62 per cent, the proportion of UK employers that had increased pay/earnings in the last year was significantly higher than recorded a year earlier (44 per cent).

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