Business confidence in hiring fell by nine percentage points to net: +13 in August-October, decreasing for the fourth consecutive rolling quarter. With uncertainty growing around rising inflation, continued labour shortages and the increasing spread of COVID-19, confidence in the wider UK economy also fell by 13 percentage points to net: +3. Overall, however, a slightly higher proportion of firms said their prospects were still improving, rather than getting worse.
Neil Carberry, Chief Executive of the REC, said:
“With the sugar rush of re-opening the economy passing now, it was always likely that employer confidence would drop from the historic highs of a few months ago, so it is good to see that sentiment is still slowly improving. Businesses are resilient, but as the pace of recovery starts to slow, big new questions need to be addressed to ensure we stabilise with a growing economy – the right skills, infrastructure and monetary policies will all be at a premium in the next few months, especially in the face of rising inflation. With worker shortages likely to persist for years, one part of this is a proper cross-government agenda of working with businesses on a national workforce strategy. As the experts in the jobs market, recruiters are well placed to help with this.”
Despite confidence growth slowing, demand for permanent staff remained high at net: +22 in the short term and net: +23 in the medium term. Hiring intentions for temporary workers in the next three months remained stable at net: +8, and demand for the next 4-12 months rose by two points to net: +5.
The survey also found that in October, one in two UK businesses’ key priorities for the Budget were for government to invest in sectors still struggling from the pandemic (50%), and industries challenged by current worker shortages (48%).
Three in ten (31%) wanted government to increase funding and provision for lower-level skills training, whilst a quarter (24%) expressed a desire for reform to the apprenticeship levy scheme, to allow funds to be used more flexibly.