Stuart Gentle Publisher at Onrec

Employers turn to temps amid economic uncertainty

Employers continue to turn to temporary staff to fill jobs in the face of economic uncertainty and labour shortages, according to new Recruitment & Employment Confederation (REC) data.

In the fourth quarter of 2022, employers’ confidence in both the UK economy and their ability to invest in their business remained low, falling from -67 and -27 in July-September to -68 and -30 in October-December 2022. Both measures continue to surpass the previous pandemic-related record lows in June 2020 (-57 on the economic outlook and -13 on investment intentions).

Despite the drop in confidence, the immediate outlook for hiring remains positive for both permanent and temporary workers. Anticipated demand for temporary agency workers continued to rise – improving by 1%, quarter-on-quarter, to +7 over the next three months, and 4% to +8 in the next four to 12 months. Employers report that hiring intentions for permanent staff were +11 over the next three months, down by 6%, and +15 over the next four to 12 months, down by 3%.

Neil Carberry, Chief Executive of the REC, said:

“Today’s data shows that businesses remain concerned by the economic outlook. That is no surprise, given high inflation and global economic and political uncertainty. But hiring intentions show that firms still need new staff and they also suggest that a recovery in confidence could be quite quick if inflation falls.

“In the face of high levels of uncertainty and labour shortages, it is no surprise that temporary workers are playing a bigger role in companies’ plans. Our world-leading temporary work market remains vital to many companies. On any given day there are 1.2 million people who are working via a recruitment business on a contract or temporary assignment. Governments can help realise their potential by freeing up more of employers’ money to train and develop them by reforming the Apprenticeship Levy. Businesses across sectors are calling for this reform which will help with the labour and skills shortages that are currently holding back economic growth to the tune of around £39 billion a year according to REC research.“

Other statistics from today’s report showed:

In December 2022, 65% of surveyed employers reported that a lack of government support is one of the greatest barriers to creating a ‘green industrial revolution’ in the UK. More than half (55%) of respondents also believe that the UK workforce lacks the ‘green skills’ needed to fulfil the ‘green job’ requirements.