REC JobsOutlook: Employer confidence rises but skill shortage worries remain

Wednesday, February 26, 2020
New data from the Recruitment & Employment Confederation (REC) shows that businesses have become more confident in their ability to hire new staff.

The REC’s latest JobsOutlook survey shows that employers’ confidence in making hiring and investment decisions has increased by ten percentage points from the previous rolling quarter. It has returned to positive territory for the first time since October 2019 and sits at a net figure of +7.

Demand for permanent staff also remains high, both in the short and medium term, at net: +21 and net: +26 respectively. Businesses are looking to expand their workforce after months of uncertainty and delay.

However, half (49%) of employers of permanent staff are already worried about finding enough candidates to fill their permanent vacancies. These worries are especially pronounced in sectors like health and social care and construction – industries where the government’s new immigration policy will have serious negative consequences for allowing labour into those sectors.

Other key data points from the latest include:

  • Demand for temporary agency workers fell back into negative territory this quarter. Large employers especially have become more negative about hiring temps, perhaps due to the administrative burden of the upcoming IR35 changes.
  • More employers highlighted the importance of agency workers for responding to growth (up from 57% to 69%) and for managing organisational change (up from 54% to 68%) compared to a year earlier.
  • Seven in ten (71%) employers who hire agency workers said that it is important that their recruitment agency partners provide information on how to manage your temporary workforce as a service.

Tom Hadley, Director of Policy and Campaigns at the REC, said:

“Businesses across the country have grown more confident since the election. With more certainty about what lies ahead in the short term, many have taken the opportunity to start hiring again. Now that demand for staff is on the rise and the majority of employers have little or no spare capacity in their workforce, staff availability is the major challenge. 

“As a result, last week’s immigration policy announcement has worried many employers. Sectors like healthcare, construction and logistics currently rely on workers from overseas, and are already facing labour shortages. Although the government might refer to these roles as ‘low-skilled’, they are highly important – not just for employers but also for patients, consumers and existing staff who are already overworked. We need a temporary work visa that allows businesses to hire the people they need at all skill levels and pay grades.”

JobsOutlook is the REC's monthly survey detailing the hiring intentions of UK employers.  JobsOutlook features in-depth analysis and insight about the UK's labour market, including detailed responses from employers about workforce planning. The report also includes data about demand and anticipated candidate shortages covering more specific job roles than before including: health & social care, construction, drivers, legal and HR, marketing, media and creative.