95 percent of UK businesses must hire if demand increases says the Recruitment and Employment Confederation (REC).

Four in ten employers (39 percent) do not have the capacity to take on more staff and 56 percent have only a little capacity according to the latest JobsOutlook survey by REC.

The latest data reveals another month-on-month increase in the number of employers saying they need to take on more staff to meet a growing demand. Since August 2014 the number of employers with limited or no capacity has increased from 90 percent to 95 percent. The number of employers reporting ‘a fair amount’ of spare capacity has halved from 10 percent in August 2014 to 5 percent in February 2015.

REC chief executive Kevin Green said:

“We heard a lot in last week’s Budget that confirms what employers are saying to us; that confidence is returning to the market and that businesses are seeking to take advantage of increasing demand. The government also announced new investment in infrastructure and transport initiatives, which is a further sign of the strengthening economy.”

Eight out of ten employers (79 percent) said they plan to hire more permanent staff in the next three months. A further 13 percent say they intend to maintain current staffing numbers and 8 percent say they will reduce their headcount.

Green adds:

“Questions remain however about where employers will find the skilled workers to carry out these projects, and to respond to growth. Employers are already reporting talent shortages in key industries like engineering, IT and construction. Fixing this needs to be a priority for the next government so that the UK can continue to prosper. That means a sensible approach to immigration so that businesses have access to the talent they need today, while the government improves careers advice in schools and encourages more young people to study the right subjects.”

Twenty-four percent of employers highlighted that there is an anticipated shortage of temporary workers with technical and engineering skills, with 19 percent sharing this worry for permanent workers.

In response to this, Green says:

“Recruiters also have a major part to play in connecting employers to untapped talent pools, such as the 1 million older workers who are not currently employed, and who could provide the skills and experience that employers are looking for.”