With all the negative headlines at the moment surrounding the economy, the cost-of-living crisis, interest rates and global supply chains, you would be forgiven for thinking that all of the green shoots of growth that we were starting to see earlier this year, have been dramatically cut down. We take a more detailed look at the current viewpoint in our recruitment and employment autumn review.
There are of course some unavoidable facts. The UK, like many other major economies around the world, is in recession, with the Bank of England predicting it could last for 2 years. Further confirmation of this, as well as some long-awaited detail about the UK’s forthcoming economic policies will come with the Chancellor’s statement on 17th November. The causes of this recession are wide-ranging but include rising inflation, the war in Ukraine and wider issues relating to long-term fiscal policies both here and abroad. There is also the ripple effect from the Covid-19 pandemic and Brexit to contend with. With all of that taken into account, what is this doing for business confidence and more relevantly, employment and recruitment?
What patterns are we noticing?
Recruitment is often on the front-line of any economic peaks and troughs and here at Plus One, we’ve noticed that whilst there has been a reduction in demand for the hiring of permanent employees, the jobs market is still performing relatively well. This is likely to continue throughout Q4 and into Q1 as skilled candidates remain in short supply, and unless unemployment starts to rise, there will continue to be a demand for talent.
The number of businesses hiring temporary and contract staff is increasing month on month and this is likely due to the need for staffing, but also considers a cautiousness about hiring permanent employees during whilst the economic outlook is uncertain.
KPMG Report on Jobs for October 2022
Commenting on the latest survey results, Ian Brokenshire, Senior Partner at KPMG UK in the Southwest, said:
“The looming recession is clearly impacting the UK jobs market. Employers’ increased reluctance to hire combined with fewer available candidates has resulted in the overall number of permanent placements falling. However this doesn’t negate the need for staff across the South, as evidenced by the sharp rise in temp billings. As we head to the end of Q4, we expect some employers to continue scaling back on new hires, and instead increase benefits and learning and development opportunities for current employees as a retention measure. Now more than ever, it’s essential that we focus on upskilling the workforce to support and boost economic recovery when it comes. The jobs market will bounce back, particularly if we invest in the skills of the workforce, across all areas of the economy,”
Neil Carberry, Chief Executive of the REC (Recruitment & Employment Confederation), said:
“The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year. We’ve witnessed a further reduction in permanent staff appointments in the South of England for example, but temp billings growth has quickened. Activity, overall, is still well in advance of pre-pandemic levels. We will need to watch how this story develops over months to come, but so far this data suggests heightened employer caution, not a retreat from the market.
“It remains the case that firms in many sectors are struggling to hire, as hours worked remain below their pre-pandemic level despite record-low unemployment. We’re looking to the Autumn Statement later this month to help with removing the brakes on growth by reforming the apprenticeship levy to build a more effective skills system, improving support to help people move from inactivity to work, and align other policy areas – like work permits – with a growth strategy.”
A modest decline in permanent recruitment activity, bolstered by an up-tick in contract and temporary hiring would suggest that employers still have the will to recruit, and to manage those skills-gaps within their workforce. But, this has been laced with some cautiousness in recent months, which should be expected. Key roles will always be ‘mission critical’ in any business and whilst there is a general shortage of skills right now in almost all sectors, it’s important that companies move to hire into their vacancies quickly, as jobseekers naturally become much more hesitant about changing jobs during a recession.
If you would like to speak to a member of our team about hiring into your business, either on a permanent or temporary basis, then please feel free to contact us.