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RECs JobsOutlook: Employers show more caution but many still plan to hire in 2012

REC’s JobsOutlook:  Employers show more caution but many still plan to hire in 2012

This month’s REC JobsOutlook shows more employer caution with regards to hiring new staff. However, a significant number of businesses still plan to increase their workforce in 2012 and finding the right candidates remains a major challenge in some sectors. This underlines the need to address the & lsquo;skills dislocation’ within the UK jobs market.

January’s JobsOutlook survey, which tracks future hiring intentions rather than actual placements, confirms that many employers are now waiting for an upturn in economic prospects before they commit to growing their workforce. This month’s report shows that: 

Employers are showing increasing caution although many still plan to hire: A marked dip in the short-term prospects for permanent staff was reflected in a two point drop over the month with 63 per cent expecting to increase their workforce and another 31 per cent planning to retain their present headcount. With regards to the longer term outlook, 59 per cent expect to take on more permanent staff over the next twelve months and another 39 per cent intending to maintain staffing at existing levels, an eight point decrease on the previous month. Despite the dip in business confidence, it is interesting to note that a significant number of businesses plan to increase or maintain staffing levels in the short and medium term.

Skills shortages in 2012:  Employers identified a number of key sectors where skills shortages were likely to be encountered over the coming year. On the permanent side, shortages were expected in professional and managerial roles nursing, medical and healthcare  and Education and Training. For temporary staff, skills shortages were likely to occur in Driving and Distribution (21 per cent), Catering and Accommodation (21 per cent) and Accounting/Financial (16 per cent).

Demand for temporary staffing remains firm:  Despite the first 12 week qualifying period for agency workers to receive equal treatment having been reached in December, expectations over short term demand for agency staff have remained stable.

Twenty seven per cent of employers plan to increase their use of agency workers during this period, with another 57 per cent saying theirs would remain at the same level – a total of 84 per cent.  The long term forecast is for most employers – 65 per cent – to keep their usage at existing levels while 22 per cent said they planned an increase.

Commenting on the latest statistics, Roger Tweedy, the REC’s Director of Research said:

 “Last November’s figures showed that many employers were hoping to slightly increase their permanent workforces early in the New Year. However, there has been a significant dip in employer optimism that is likely to be linked to continuing economic concerns over the sovereign debt crisis in the Eurozone.  

“Most employers have retrenched to a much more cautious & lsquo;wait and see’ approach, which is starting to be reflected in the REC’s Employer Confidence Barometer index which fell back one point from the month before. However it is important to note that this confidence index is still five points above its lowest mark last September and that a significant number of businesses still plan to take on new staff during the course of year, despite the slight change in mood.

“The outlook for temporary staff remains encouraging despite the Agency Worker Regulations (AWR) now being in force. Since October, 65 per cent of employers have not made any changes to their use of agency workers following AWR implementation. This suggests that the impact of the Regulations is mainly being felt in certain specific sectors. The data also shows that the vast majority of businesses plan to maintain or increase their use of temporary staff which indicates that flexible working options will continue to provide an important outlet for employers and job-seekers.”

JobsOutlook is based on a monthly survey of employers with results based on a sample of 600 on a three month rolling basis. To subscribe to JobsOutlook, visit the website, http://www.rec.uk.com/about-recruitment/research/research-bundle

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