JobsOutlook: More employers seek out support of temps as confidence levels fall in second lockdown

As COVID case numbers rose in the lead-up to the second national lockdown in England, employers’ confidence levels fell according to the latest JobsOutlook.

The REC’s report found that employers’ confidence in their ability to make hiring and investment decisions fell by five percentage points from the previous rolling quarter. This left it at net: -5 for the three months to October 2020. Business confidence in the wider UK economy also fell by five points to net: -49 over the same period. However, confidence levels remain far higher than reported in the spring.

In recent months, employers’ intentions to hire permanent staff had been improving, but this fall in confidence has caused it to stall. Demand for permanent workers remained stable in both the short term and medium term, at net: +14 and net: +17 respectively. This suggests the possibility of a recovery as we leave the lockdown and vaccines are rolled out.

In this uncertain time, an increasing proportion of firms are looking to temporary workers for support. Short-term demand for agency workers rose by three percentage points from the previous rolling quarter to net zero, while medium-term demand rose by seven points to net: +4.

Neil Carberry, Chief Executive of the REC, said:

“The autumn proved challenging for many businesses as the pandemic took a turn for the worse, something that is reflected in today’s figures. Once again employers are looking to temporary workers to help them through – and Britain’s flexible labour market is doing exactly what it needs to, supporting firms, workers and the economy.

“Today the Chancellor has a chance to boost both business and consumer confidence in the Spending Review, and we’ll be looking for a number of measures in his speech today – including a cut to employers’ National Insurance, which would help incentivise job creation as well as minimising further redundancies. Other measures which would maintain and enhance the ability of our jobs market to bounce back would be funding support for limited company directors – who have been forgotten so far – and steps to fund Statutory Sick Pay for all. SSP support would reduce the risk of hiring temporary workers and encourage more placements to be created. Broadening the apprenticeship levy would help people get the training they need to stay employed and find new work during this difficult winter.”

Other key figures from the latest JobsOutlook include:

• This quarter, more than half (53%) of employers who hire agency workers said that they use them to help manage uncertainty. This was notably higher than a year earlier (39%).
• One in three (35%) employers reported having no spare capacity in their workforce, rising to 46% among businesses in the Midlands.
• Seven in ten (72%) employers who use recruitment agencies were satisfied with their recruitment partners.

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 3 August and 30 October 2020. 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 2192 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.