Employer confidence in the UK’s economy is at its lowest since the referendum, with a net balance of -14, according to the latest JobsOutlook survey from the Recruitment & Employment Confederation (REC). More than a third (35 per cent) of respondents think that the country’s economic conditions are getting worse, while only one in five (22 per cent) think they are improving. The net balance of hiring and investment decisions has also fallen by two points to nine.
At the same time, a third of respondents (34 per cent) say political and economic uncertainty is the main challenge to their business. However, a shortage of suitable candidates for jobs is the other main challenge for 24 per cent of employers.
The JobsOutlook survey of 600 employers also finds that the proportion of employers who respond ‘don’t know’ when asked about short term hiring intentions for temporary staff has increased noticeably to 27 per cent from nine per cent at the same point last year.
The net balance of employers who plan to increase rather than decrease their permanent staff over the next three months has gradually fallen from 19 in January 2017 to 14 today.
Employers in London have the strongest reaction to uncertainty, with 49 per cent being unsure about the number of temporary workers in their organisation in the next three months. In addition, the number of employers transferring more than half of their temporary staff to permanent status has gone down (five per cent in January 2018 compared to 16 per cent at the same point last year).
REC chief executive Kevin Green says:
“It looks like political uncertainty is a serious problem for British businesses as they start the new year. The government’s inability to conclude Brexit negotiations is having an impact on employers’ decision making.
“Confidence in the economy is dropping and we now see this is starting to affect hiring intentions as more employers are unsure about the impact of Brexit on the economy.
“We’ve got record highs for both the number of vacancies and the number of people in employment but finding candidates is becoming more challenging. So the question is, where will we find these people?
“Businesses need clarity about a post-Brexit immigration system. The government has done nothing over the past few months to reassure employers about the status of their EU staff, or if they will be able to have access to non-UK workers in the medium term. If the government wants to secure prosperity for the UK they have to lead the country at this uncertain time. The clock is ticking for the UK labour market.”