JobsOutlook: Employer confidence growth slows markedly amidst uncertainty

The rate of growth in employer confidence in the UK dropped sharply in the three months to October, according to the Recruitment & Employment Confederation (REC)’s latest JobsOutlook survey.

Business confidence in hiring fell by nine percentage points to net: +13 in August-October, decreasing for the fourth consecutive rolling quarter. With uncertainty growing around rising inflation, continued labour shortages and the increasing spread of COVID-19, confidence in the wider UK economy also fell by 13 percentage points to net: +3. Overall, however, a slightly higher proportion of firms said their prospects were still improving, rather than getting worse.

Neil Carberry, Chief Executive of the REC, said:

“With the sugar rush of re-opening the economy passing now, it was always likely that employer confidence would drop from the historic highs of a few months ago, so it is good to see that sentiment is still slowly improving. Businesses are resilient, but as the pace of recovery starts to slow, big new questions need to be addressed to ensure we stabilise with a growing economy – the right skills, infrastructure and monetary policies will all be at a premium in the next few months, especially in the face of rising inflation. With worker shortages likely to persist for years, one part of this is a proper cross-government agenda of working with businesses on a national workforce strategy. As the experts in the jobs market, recruiters are well placed to help with this.”

Despite confidence growth slowing, demand for permanent staff remained high at net: +22 in the short term and net: +23 in the medium term. Hiring intentions for temporary workers in the next three months remained stable at net: +8, and demand for the next 4-12 months rose by two points to net: +5.

The survey also found that in October, one in two UK businesses’ key priorities for the Budget were for government to invest in sectors still struggling from the pandemic (50%), and industries challenged by current worker shortages (48%).

Three in ten (31%) wanted government to increase funding and provision for lower-level skills training, whilst a quarter (24%) expressed a desire for reform to the apprenticeship levy scheme, to allow funds to be used more flexibly.

Ends

Notes to editors:

JobsOutlook is produced by the REC in partnership with Savanta ComRes. Savanta ComRes interviewed 600 UK employers involved in hiring by telephone between 4 August and 29 October 2021. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split. Savanta ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comresglobal.com.

For more information and interview enquiries, contact the REC Press Office on 020 7009 2157, 020 7009 2129 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.