Economic uncertainty dampens permanent hiring intentions

Economic uncertainty dampens permanent hiring intentions but increases demand for flexible staffing, latest REC JobsOutlook shows

Continuing fragility in the UK economy has resulted in employers increasing their long-term demand for flexible staffing whilst downgrading their plans to increase their permanent workforce in the medium and the long-term, according to the Recruitment and Employment Confederation’s latest employers’ survey, JobsOutlook.

A total of 67 per cent of employers surveyed say they have short-term plans to increase their permanent workforce over the next three months, compared to 74 per cent last month. With regards to longer prospects, 49 per cent of employers expect to expand their permanent hires over the next twelve months which compares to 66 per cent last month. A further 42 per cent expected staffing level to remain the same which indicates that 91 per cent of employers expect to maintain or increase their permanent workforce over the coming year.

Employers’ long-term demand for temporary staff has risen with 83 per cent of employers saying their use of agency workers will either grow or stay the same during the next 12 months. For the short-term, 79 per cent surveyed foresaw either taking on extra agency staff or keeping current levels static. The overall number of temporary workers in the UK is at an all-time high at 1.6 million, giving employers increasing options to flex their workforce while the current economic conditions prevail.

The impact of the public sector cuts on private sector jobs remains a concern. A total of 20 per cent of private sector employers now say they will have either a quite serious or serious impact on them. This is in addition to the direct impact of cuts on jobs in public the public sector where 66 per cent of employers believe the impact on them will be quite serious or very serious.

Commenting on the current data, Roger Tweedy, the REC’s Director of Research said:

“The fact that employers have reviewed their permanent hiring intentions this month is clearly a reflection of the uncertain economic context. However, overall confidence remains at the same level as this time last year and it is interesting to note that the number of employers planning to maintain or increase their permanent workforce over the coming 12 months still stands at over 90 per cent.

“With the economy continuing to stagnate, businesses will understandably remain cautious which is why we are seen an increase in the longer tem demand for flexible staff such as temporary and contract workers. This is a timely reminder of how a flexible workforce to help employers meet peaks and troughs in demand for services and products during uncertain times.”