POSTED: August 30 2016
Employers remain ‘level-headed’ despite drop in confidence – REC

Employers remain ‘level-headed’ despite drop in confidence – REC

The latest JobsOutlook survey from the Recruitment & Employment Confederation reveals that employer confidence tumbled during the last quarter, but also suggests that businesses are holding back from making cuts to their workforce. Twenty-four per cent of employers indicated that they would take on more permanent staff in the next three months, while 64 per cent said they will maintain their existing headcount. Just 3 per cent of employers expect to shrink their permanent workforce within the next three months.

Smaller businesses in particular reported robust hiring intentions, with more than a quarter (26 per cent) SMEs saying they would take on more permanent staff and 12 per cent predicting that their temporary staff base will increase in the short term.

Despite this positive data, the latest survey also reveals how confidence has deteriorated in recent months. In July, one in five (21 per cent) UK employers reported feeling more confident about economic conditions, down from 45 per cent in June and 51 per cent in May.

Confidence has also fallen month-on-month around hiring and investment decisions. In May, 47 per cent of employers expected their organisations to become more confident when hiring. In June this fell to 39 per cent, and in July to 25 per cent.

REC Chief Executive Kevin Green says: “It’s not surprising that confidence took a knock following the referendum result, but there are reasons to be cautiously optimistic. SMEs are the lifeblood of our economy and it’s encouraging to see that hiring intentions remain strong within this group, suggesting they have taken the referendum result in their stride.

“In general employers have avoided knee-jerk reactions to staffing and this ‘business-as-usual’ approach bodes well for the UK jobs market in the next few months. Recruiters tell us that while their clients are taking longer to confirm permanent appointments, vacancies have continued to grow since the referendum. As business continues to do its bit we now need government to show the same level-headedness to restore economic confidence.”

The JobsOutlook survey shows that a quarter (24 per cent) of public sector organisations have made redundancies in the last 12 months. Commenting on this, Kevin Green added: “Public sector organisations have been under pressure to reduce costs for some time, and with the easy savings having already been made we’re now seeing some redundancies. It’s likely that this will feed through into poorer levels of service. At a time when schools and hospitals are already struggling to perform, this situation doesn’t seem sustainable in the long term.”

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