Businesses pessimistic about 2018 economy

Economy

Not one of the 200 employers polled by the Recruitment & Employment Confederation (REC) for this month’s JobsOutlook survey thinks economic conditions in the UK will be less challenging in 2018 than in 2017. More than half (51 per cent) think economic conditions in 2018 will be more challenging than this year, while the rest (49 per cent) think they will remain the same.

In addition, the latest JobsOutlook survey shows that employer confidence in current economic conditions remains negative for the fifth month running. A third (33 per cent) think economic conditions in the country are worsening, while a quarter (25 per cent) think they are improving. This leaves the net balance (-9) at the joint lowest recorded level since the Brexit vote last year, equalling the score recorded in October 2017.

The survey also finds that employer confidence in hiring and investment decisions is still positive but is now falling, with a net balance of +11 (down three points since last month).

However, employers are feeling uncertain about their hiring strategies. A quarter (26 per cent) of employers said they don’t know if their organisation will increase or decrease their number of agency workers in the next three months, a significantly larger proportion than the 6 per cent that said this last month.

The net balance of employers planning to increase permanent staff in the short term is falling (now +13, down two points on last month) but is higher than the net balance of employers planning to increase temporary agency worker headcount (+3).

REC chief executive Kevin Green says:

“Despite the economic malaise, the number of businesses planning to employ new people still outnumbers those planning reductions. This is good news against a deteriorating backdrop.

“However, confidence in the UK’s economic conditions being negative for a fifth consecutive month paints a rather bleak picture. With 2017 coming to an end, it is worrying that so many businesses think mainly of challenges when it comes to next year’s economy.

“The government needs to take action quickly to reassure employers that their EU workers can remain in the UK while also setting out a sensible post-Brexit immigration policy. This could help turn the mood around, so we can ensure 2018 continues the successes we’ve seen this year in terms of high employment rates and continued job creation.”

David Willett, Corporate Director at The Open University, said:

“Regardless of their hiring expectations, seven in 10 business leaders think they will struggle to find talent with the skills they need next year, with the skills shortage remaining a prominent issue.
In the ideal scenario, candidates would come with the experience and qualifications required, but a higher skills gap means employers may need to invest in training to ensure that their organisation is protected against economic, technological and political changes in the future.

“With Brexit and growing opportunities stemming from automation and digitisation, it is essential that leaders focus on future-proofing their organisations efficiently – which means building skills from within, rather than paying over the odds for workers who are in demand. The introduction of the apprenticeship levy and new degree apprenticeships offers high quality, accessible opportunities to increase skills, giving organisations who embrace them the capability and flexibility to succeed.”


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