London hiring confidence halves, report reveals

Against the backdrop of record employment and ongoing Brexit negotiations, employers in London are bearish about hiring, according to research from the ManpowerGroup.

The ManpowerGroup Employment Outlook Survey is based on responses from 2,100 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic statistic by both the Bank of England and the UK government.

Simon Edwards, Operations Director for Manpower said:

“The sluggishness of the London jobs market suggests concern that challenges lurk around the corner. We are seeing this in the City with a hiring slowdown for core finance positions, such as general accountancy. Businesses also don’t seem to be investing in bigger projects which require temporary workforces. As Brexit concerns begin to bite, we know businesses are struggling to attract talent from outside the UK. Employers who ran programmes encouraging international applicants are now concerned about imminent talent shortages.”

“Broadly, there are fewer job applicants in London, particularly for technical jobs. It has been hard to find strong candidates for construction, mechanical and electrical engineering jobs. Those that do apply for jobs are sometimes unsuitable, and those that are suitable already have multiple job offers. All in all, London jobs sentiment is currently fragile.”

Nationally, employers have recorded a one point uptick in optimism with a national Outlook of +6%. A surge in positivity among public sector employers is a key factor in the improved national picture, with hiring intentions in this sector up 4 points to +2%, the biggest rise since 2015.

James Hick, ManpowerGroup Solutions Managing Director:

“This is the first time in over a year that public sector hiring plans have been in positive territory. June’s general election outcome was seen in part as a rejection of austerity, and it looks like the public sector is powering on, as hiring ramps up. At the beginning of the year there were 86,000 vacancies in the NHS; the government recently announced that it will train an additional 1500 doctors a year and create 20,000 new mental health posts. However, with the health service so heavily dependent on EU nationals, these hiring targets are going to be extremely difficult to meet.
And that’s just the NHS; there are tens of thousands of vacancies in other government departments.”

“The tough reality lurking beneath all these positive indicators is that these hiring intentions may not come to fruition because of difficulties attracting and retaining skilled employees. Take construction, where companies are reporting a stronger pipeline of work than they have for years with an Outlook this quarter of +11%, up six points from last quarter. However, without a pool of skilled workers to actually do the work, buildings will go unbuilt and projects will flounder. There is lots of talk around what we need to do to fix the UK’s ailing housing market at present but politicians’ promises are just hot air without the essential skilled talent needed to deliver these programmes.”

Regionally, the East of England forecast tops the charts at +11 per cent, while employers in the South East maintain their confident streak with an Outlook of +10 per cent. Another winner is Northern Ireland following the DUP-negotiated “supply and demand” deal resulting in a cash injection of at least £1 billion. This has already boosted hiring optimism in Northern Ireland, where employers report a surprise jump ahead of the UK national average to +7 per cent this quarter.

Commenting on the latest Manpower UK Employment Outlook Survey, David Willett, Director at The Open University, said:

“Many organisations are still looking to hire new staff, but it can be a difficult and time-consuming process. Employers are struggling to find talent with the skills they require – particularly when it comes to transferable skills like management and IT. Instead of incurring the costs of recruiting new talent, organisations need to consider the potential within their existing workforce, and use opportunities such as the apprenticeship levy to their advantage. 

“With skills shortages still posing a significant issue for UK organisations, work-based learning provides a viable solution, without all of the costs associated with bringing in new talent. Those who are able to embrace workplace training will find themselves more agile, standing them in good stead within the unpredictable political and economic climate.”

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