Employer confidence plummets amid Brexit uncertainty

Employer confidence in the UK economy has dropped to its joint-lowest level since mid-2016, according to the latest JobsOutlook report from the Recruitment & Employment Confederation (REC). 

The report, released this morning, reveals that this is only the second time that confidence in the economy has dropped to this level, net: -31, since REC records began.

The findings also show that businesses have ambitious plans for recruitment. In the short term, employers’ intentions to hire permanent staff rose to a net figure of +24, while hiring intentions for temporary agency workers remained strong at net: + 10.

But feedback from the REC’s survey of recruiters shows that many organisations are scaling back, or even cancelling, their hiring plans owing to their lack of confidence and ongoing uncertainty about Brexit.

Other key points from the latest JobsOutlook include:

· Three in four (74%) employers claim they have little or no surplus workforce capacity, rising to 82% in large (250+ employee) businesses.

· More than half (52%) of relevant employers harbour concerns about the availability of permanent staff for hire this quarter, with health & social care being the skills area of most concern.

· Two in three (66%) employers of temporary agency workers stress these workers are important for short-term access to key skills, up from 55% a year earlier.

· This quarter, three in four (73%) employers who use recruitment agencies say they are satisfied with their agency partners. Satisfaction increased to four in five (81%) among mid-sized (50-249 employee) businesses.

Commenting on the findings, REC CEO Neil Carberry said: “These figures show the damage that political indecision is causing to business confidence. Companies are ready to hire, invest and grow – but the lack of a clear path ahead means that more and more are thinking twice. Whether it is Brexit or the spill-over from Trump’s trade war, politicians need to prioritise jobs and growth over ideology.

“It is in uncertain times such as these that the value the recruitment industry brings is most visible. Businesses rely on the expert advice that recruiters offer, while candidates get help to navigate a more uncertain market with confidence. Temporary work is an important part of this – keeping people working and the economy going in uncertain times. Temps are a key part of the labour market, and we must make sure government policy protects them. 

“The REC is urging government to rethink its approach to IR35 changes, and to ensure new employment laws work for all forms of employment – not just those on a permanent, fixed-hours contract.”

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