Jobs Outlook: Hiring intentions continue to rise despite increased worries about the economy

In the final quarter of 2020, employers were feeling more confident about hiring and an increasing proportion expected to bring in new permanent staff in the coming months – despite the health restrictions brought on by rising numbers of COVID-19 cases and worsening economic circumstances.

The Recruitment & Employment Confederation (REC)’s latest JobsOutlook found that in October-December, business confidence to make hiring and investment decisions rose to a net level of +5, four percentage points higher than in September-November.

Employers’ intentions to hire permanent staff also rose, both in the short and medium term. Sentiment towards hiring in the next three months and in the coming 4-12 months both increased to the same level – net: +24. Hiring intentions for temporary agency workers also remained in positive territory, at net: +5 in the short term and net: +13 in the medium term. Firms will be looking to bring on new staff in the months ahead as long as they are able to do so.

This rising optimism towards hiring sits in stark contrast to employers’ confidence in the wider economy, which dropped to net: -52 in the final quarter of 2020 as the second wave of Coronavirus grew and further health restrictions were imposed. It remains the case that business leaders are more confident in their own firm than the wider economy.

Neil Carberry, Chief Executive of the REC, said:

“The UK’s labour market is resilient, even in tough times like these. There are still reasons for optimism about 2021 once we move past current lockdowns. With the vaccine rollout continuing at pace, employers are hoping that things will move towards normal, unlocking investment and jobs as they focus on growing their businesses. Recruiters are uniquely positioned to help firms do this, and help candidates get back into work.

“The challenge now is for Government to help businesses get through these next few months until the majority of people have been vaccinated. Waiting until the March Budget for clarity on support will be too late. New plans for businesses – including deferring repayments of 2020 support, and reducing the cost of furlough to firms – would help keep more people in work and more businesses healthy.”

“Family businesses, owner-operated by their Directors, have waited too long for help after being left out of last year’s support schemes. The Northern Ireland Executive led the way this week with a new scheme for these firms – these must be replicated across the rest of the UK. Acting now could save thousands more jobs and set firms up to hire quickly as the economy bounces back.”

Other key figures from the latest JobsOutlook include:

• Three in ten (28%) employers reported making redundancies in the year to October-December 2020, while two in five (39%) had reduced workers’ hours. In both cases this was up from just 10% in the year to October-December 2019.
• Satisfaction levels with the candidates presented by recruitment agencies rose from 67% in October-December 2019 to 79% in the last quarter of 2020. Satisfaction with agencies themselves rose from 65% to 78% over the same period.
• In December 2020, when asked what would be their biggest challenges for 2021:
  • two in five (41%) cited ongoing public health restrictions and social distancing measures
  • one in three (36%) said regulatory changes related to Brexit
  • just 17% said recruiting new staff

Content from the REC:  Rec.uk.com