JobsOutlook: Employer confidence in hiring at an all-time high, but staff shortages threaten to damage their optimism

In the three months to June, employers’ confidence in their ability to hire new staff and make investment decisions was improving. Confidence levels rose to a net level of +33. This was at the highest level ever recorded by the Recruitment & Employment Confederation (REC)’s JobsOutlook survey, which began in mid-2016.

The REC’s latest survey also found that business confidence in the UK economy rose by six percentage points to net: +17. This is the second rolling quarter in a row the barometer has been in positive territory.

Kate Shoesmith, Deputy CEO of the REC, said:

“As restrictions have lifted over the past few months, we have seen employer confidence shoot upwards, and the confidence in hiring has reached a new record high. More importantly, this has translated into real-world recruitment activity, with more job adverts being posted and recruiters are working harder than ever to hire the right people for the right roles.

“But a number of factors including the ‘pandemic’ are causing serious staff shortages now. Many hirers are seeing workers feel understandably more cautious about changing jobs after such an unpredictable 18 months. Businesses will have to think hard about their offer if they want to attract staff, not just in terms of pay but also benefits, working conditions, and work-life balance. We have the opportunity to shift perceptions around flexible working once and for all and make it a positive option. Government and employers urgently need to join forces to create a skills system that delivers the staff the country needs. And while the uncertainty continues, we need to maintain digital Right to Work checks for UK nationals from 1 September so employers can get people into work quickly and safely.”

With the economic outlook improving and restrictions being eased between April and June, more businesses are looking to bring in more temporary staff in the coming months to help them navigate the fluid nature of the pandemic. In the three months to June, hiring intentions for temporary agency workers in the short term (in the next three months) increased by four percentage points to net: +28.

Other key figures from the latest JobsOutlook include:

  • Employers’ intentions to hire permanent staff in both the short and medium term remained high at net: +23 and net: +26 respectively.
  • Demand for agency workers in the medium term (in the next 4-12 months) fell by eight percentage points, to net: +16.
  • In June, one third (33%) of all respondents said that they were struggling to hire new staff because workers are reluctant to change jobs, while one in four (26%) said it was because they couldn’t offer competitive salaries.