JobsOutlook: Employer confidence in hiring bounces back – REC

Employer confidence in hiring returns to positive territory for the first time since the beginning of 2022, according to new Recruitment & Employment Confederation (REC) data.

In February-April 2023, the net balance of employers’ confidence in making hiring and investment decisions was +2 – restoring to positive territory the first time since January-March 2022. Employers’ confidence in the UK economy has also started to improve to -43 from -51. As confidence improved, employers reported that forecast demand for both permanent and temporary workers in the next 3 months rose to +18. Hiring intentions for permanent staff in the next 4 to 12 months also rose to +21 from +19. Forecast demand for temporary agency workers in the next four to 12 months, however, decreased slightly to +9 from +12. This may reflect firms feeling more able to make permanent hires.

Neil Carberry, Chief Executive of the REC, said:

“This data is good news – it shows firms starting to feel more confident again. Employers always feel more confident in the business they know – their own – so it is no surprise that views of the wider economy are lagging a bit. But a return to hiring is likely to re-emphasise the people and skills challenges we face. As the REC has pointed out, the UK could leave £39 billion of prosperity on the shelf – two Elizabeth Lines, every year – unless we can tackle the structural challenge we face on productivity and labour supply.

“Businesses across the country need to step up on their workforce planning to grow effectively – recruiters are there to help them with that. But we also need government action – from skills reform to immigration and employment regulation. As part of a cohesive industrial strategy, we need to start putting the people stuff first.”

Ends

Notes to editors:

JobsOutlook is produced by the REC in partnership with Savanta ComRes. Savanta ComRes interviewed 602 UK employers involved in hiring by telephone between 1 February and 3 May 2023. 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.

Economic modelling for the REC published in July 2022 found that with a 10% spike in demand in the economy, and the labour market restricted by shortages, the UK economy would shrink by between 1.2% and 1.6% by 2027, relative to where it would be without these shortages. This could cost the economy anywhere between £30 billion and £39 billion every year – equivalent to losing almost the entire current defence budget or two Elizabeth Lines annually. For more read REC’s Overcoming shortages – How to create a sustainable labour market – July 2022.

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