New research indicates that businesses’ hiring confidence is on the rise this month despite the introduction of tougher restrictions in light of a rapid rise in COVID-19 cases.

According to new research conducted by the Recruitment and Employment Confederation (REC), employers have reported a higher level of confidence linked to their ability to hire staff. This is in spite of new tougher tier restrictions being introduced due to COVID-19 and the potential of a no-deal Brexit.

Overall, employers’ confidence in making hiring and investment decisions rose by six percentage points in the three months leading up to November, reaching +1. This marked the first time since the start of this year (January-February 2020) that this value was in positive figures.

This is generally in line with previous trends and figures. Since the summer, employers’ intentions to hire permanent staff has been improving.

Specifically, demand for permanent workers in the short term (next three months) grew by six points to +20, while medium-term demand (four to twelve months) grew by five points to +22.

Additionally, in the run-up to Christmas, many businesses were interested in taking on temporary staff to fill seasonal vacancies. Short-term demand for agency workers rose by five points from the previous rolling quarter to +6. Medium-term demand meanwhile rose by eight points to +12.

Over half of employers (56 per cent) reported hiring temporary workers to help manage uncertainty which was a significant increase from 2019’s figures of 41 per cent, showing how COVID-19 has also altered the hiring landscape.

However, this confidence from businesses did not transmit to all areas. The report found that businesses’ confidence in the wider UK economy continued to fall by 2 points, reaching – 51.

Additionally, Britain’s impending exit from the EU is also weighing heavily on businesses. Less than one in 10 businesses (6 per cent) said that they were ready for Brexit, owing to the fact that trade talks are still currently underway.

Due to this, the REC believes that a grace period should be allowed which would give businesses time to adapt to the new rules.

Neil Carberry, Chief Executive of the REC, said:

This has been a rollercoaster of a year for businesses – and last Saturday’s announcements were another turn on that ride. Our report today points to a more hopeful future for the UK jobs market, if we can begin to get through the crisis as the vaccine rolls out.

Business leaders around the country will be working out what the new controls mean for them – and taking the steps necessary to protect strained cashflows. It’s essential that the economic response stays in step with this, and that repayments of 2020’s support don’t get in the way of 2021’s recovery, in areas like the VAT deferral and on loan schemes.

Even now, the challenges at the border remind us that we need business to flow as normally as possible from January 1st to help us make progress, whatever the outcome of the Brexit talks. Just 6 per cent of the businesses we surveyed felt they were prepared for Brexit. That’s because their most basic questions are still unanswered – like how to invoice their customers in the EU or travel for business from 1 January.

Like many business bodies, we believe a grace period is now imperative so that firms have time to adapt to new rules. It’s important that this applies to services – about 80 per cent of our economy – as well as goods, meaning the grace period should extend to business travel rules and permission to trade services in EU member states for a short period.

*This research was taken from the REC’s most recent Jobs Outlook which was produced in partnership with Savanta ComRes. Savanta ComRes interviewed 600 UK employers involved in hiring by telephone between 1 September and 26 November 2020. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split.