Stuart Gentle Publisher at Onrec

JobsOutlook: Hiring confidence returns to positive territory but wider outlook remains gloomy

Employers report that their ability to make hiring and investment decisions is now improving for the first time since February as lockdown eases. However, business confidence in the wider economy remains weak.

The Recruitment & Employment Confederation (REC)’s latest JobsOutlook survey found that employers’ confidence in making hiring and investment decisions rose to a net level of +4 in the first half of July. This was up from net: -9 in June, and indicates that on balance, employers think the outlook has improved from the previous month.

Businesses’ hiring intentions have also improved between June and July. Forecast demand for permanent staff in the short term (the next three months) now sits at net: +14, up from net: +6 in early June. Medium-term demand (the next 4-12 months) remained at net: +15.

By contrast, employers remain gloomy about the wider economy with confidence levels at net: -40, although they are rising from month to month. And, as expected, we are seeing evidence of companies restructuring in reaction to the impact of the pandemic. One in six (17%) employers had made redundancies in the year to July 2020, up from 9% in the year to June.

Neil Carberry, Chief Executive of the REC, said:

“It’s good to see employer confidence rising as the lockdown measures ease – at this stage we would expect things to be getting better month-by-month. Even at times like these, there are always opportunities out there for jobseekers. But businesses are still very worried about the overall outlook for the economy, and while some are hiring, many are having to make tough decisions around laying people off.

“It’s too early to tell how quickly the economy will recover, but there are steps the government can take to keep firms hiring and boost growth – including a more flexible skills system and a reduction in the government’s payroll tax, National Insurance, to reduce the cost of hiring. Equally, it’s vital that we secure a good Brexit trade deal and deliver a workable immigration system on time to build up confidence and business investment here in the UK.”