New research shows that businesses are cautious about the economy, but there is a sign of an increase in recruitment.
JobsOutlook, the latest report from the Recruitment and Employment Confederation and Whitestone Insight suggests that a sustained rebound in hiring is still possible this year. Employers were still concerned about the strength and stability of the economy.
JobsOutlook revealed that the outlook for permanent short-term hiring in the next three to six months had improved by nine points (to a net +9) during the three months leading up to April. The medium-term employment outlook for the next 4 to 12 months improved by 4 percentage points (to net +9) in the three month period to April.
This quarter, the balance of sentiment toward short-term temporary workers has been restored to positive – an increase of three percentage points (to net +3) with a rise to net +5 last month (April 2020).
A spike in optimism (to a net +14) in April was the main driver of the five-point increase in hiring intentions in medium-term temp recruitment across the quarter (+8).
The REC said that this is a positive sign for the immediate future, including summer hirings this year. It also offers good news to school leavers, graduates, and those who are looking to get into the workforce following their exams.
It cast doubts on the possibility of a significant comeback in the jobs market due to employers’ negative views of the economy. Some also feared the costs of the Employment Rights Bill.
Employers’ perceptions of the UK economy were 12 points lower between February and April – net -35, compared to the previous three-month period. Employers’ confidence to make investment and hiring choices also fell by 5 points, to a net score of -9 between February-April.
Kate Shoesmith, deputy chief executive of REC, said that businesses can see both potential and risk. “While improved hiring intentions suggest a comeback in jobs this year, the degree of any rebound depends on economic and political headwinds easing a bit on firms.” The Spending Review is therefore put to the test: Does it provide a clear path for growth that is optimistic, long-term and feasible?
She said that the reforms to Employment Rights Bill and the emphasis placed on Apprenticeship Funds, which were announced in effect this week, will help keep the job pipelines running.
Shoesmith noted that London had a markedly higher level of optimism about hiring than any other region. She said that London is expected to continue being a bellwether of the job market, as it was in the past.
The report revealed that Londoners are optimistic about permanent employment for the coming three months. Quarter-on-quarter, it went from net: -3 to net: +18. The hiring intention for the next four to twelve months in London has been restored, bouncing back from net: -2, to net: +19.
The bounce-back in London was notable on the short-term temp hiring side – going from a net -3 to a net +13 over the three-month period to April. On the medium-term hiring side, London saw a marked improvement in optimism, going from net: -5, to net: +10.
The REC reported that the outlook for permanent hires among UK mid-sized enterprises (50-249 workers) had improved significantly. This was also true in terms of the intention of these firms to hire temporary employees in the short and middle term.
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