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PROFESSIONAL HIRING INDEX: UK DIRECTORS PLAN TO INCREASE HIRING AND REDUCE REDUNDANCIES

PROFESSIONAL HIRING INDEX: UK DIRECTORS PLAN TO INCREASE HIRING AND REDUCE REDUNDANCIES BEFORE THE END OF THE YEAR

One in three (33%) UK directors anticipate the creation of new, permanent roles in the second half of the year, up nine points from 24% six months ago finds the latest Robert Half Professional Hiring Index (the & lsquo;Index’). More than half (56%) anticipate maintaining headcount levels by filling vacated positions when they arise, up six points from 50% in the first half of the year.

The number of redundancies anticipated by UK businesses is also headed in the right direction when compared to six months ago. Just 2% of firms foresee a reduction in roles compared to 9% at the beginning of the year. Even the number of firms freezing their hiring has reduced from 17% to 10%.

Jan-June

July-Dec

Expanding – adding new positions

24%

33%

Maintaining – only filling vacated positions

50%

56%

Freezing – not filling vacated positions and not creating new ones

17%

10%

Reducing – eliminating positions

9%

2%

100%

100%

 

Additional hiring is the result of several factors with nearly seven in 10 (69%) citing new projects and initiatives when senior directors were asked their top three reasons for increasing headcount. This was followed by product or service expansion (38%), new market penetration (48%), domestic business growth (48%) and international business growth (33%).

Optimism in the business climate is on the rise, with more than seven in 10 (72%) directors expressing confidence in the UK’s domestic growth prospects, up eight points from the beginning of the year. Looking at their own company’s projections, more than eight in 10 (84%) are confident – up from 77% in January - suggesting a firm’s own combination of strategies, leadership and procedures can offset other macroeconomic factors.

Additional hiring and movement in the job market is prompting directors to increasingly fear losing their best staff. Eight in 10 (84%) are concerned about losing top performers in the coming year, with one in four (25%) expressing they are & lsquo;very concerned’. Recruiting challenges persist with nearly nine in 10 (92%) citing difficulty in finding the skilled talent they require.

As remuneration prospects continue to struggle to keep pace with inflation, approximately half of firms plan for static salary (54%) and bonus (49%) prospects. The number planning to offer an increase in salaries has risen eight points to 39% and only 7% plan to decrease salaries. By industry, the public sector is anticipating the strongest salary gains, with 43% planning increases and only 3% projecting decreasing salary levels.

One in five (21%) directors will offer higher bonus prospects than earlier this year – seven points higher than in January. Public sector employees will be most likely to see increases to their bonus potential, with 28% of public sector directors anticipating increasing bonuses. In contrast, however, nearly in three in 10 (29%) also indicate that their employees will see no bonus whatsoever.

Phil Sheridan, Managing Director UK, Robert Half said: “The employment market for professional occupations continues to gain momentum with companies hiring to fill vacated roles while also creating new ones. Many companies that may have put new initiatives or expansion plans on the backburner are again taking advantage of the stronger business outlook and are hiring permanent staff to handle key growth initiatives.”

“As the job market improves, companies are finding that the pool of highly skilled talent is shrinking and the large majority is citing challenges sourcing the requisite talent and keeping them on board. While remuneration continues to be an attractive incentive, companies should also look at other valued benefits such as flexible working, tuition reimbursement and initiatives to improve work-life balance. Many companies are adopting flexible benefits packages to tailor perks to individual preferences.”

Regional findings

Directors in the Midlands are most likely to add new positions to their organisations, finds the Index, with 40% reporting an increase in roles compared to London and the South East (32%), the South West and Wales (32%) and the North and Scotland (28%).

UK Directors were asked, “What are your company's hiring plans for permanent professionals in the second half of 2013?” Their responses:

North and Scotland

Midlands

London and South East

South West and Wales

Jan-June

July-Dec

Jan-June

July-Dec

Jan-June

July-Dec

Jan-June

July-Dec

Expanding – adding new positions

22%

28%

24%

40%

28%

32%

20%

32%

Maintaining – only filling vacated positions

59%

60%

51%

55%

43%

56%

52%

52%

Freezing – not filling vacated positions and not creating new ones

11%

10%

20%

3%

19%

11%

17%

13%

Reducing – eliminating positions

8%

1%

5%

2%

11%

2%

10%

3%

 

The ability to find skilled professionals is uniform across the regions, although the proportion of directors reporting that it is & lsquo;very challenging’ to identify the right people is slightly higher in the South West and Wales (28%) than in London and the South East (27%), the North and Scotland (25%) and the Midlands (25%).

Directors in London and the South East lead the way in economic confidence, with 78% expressing confidence in domestic growth prospects in the coming 12 months, up from 69% in January. This compares to 70% in the South West and Wales as well as the Midlands, respectively, and 67% in the North and Scotland.

Company growth prospects are also on the rise with nearly nine in 10 (86%) executives in both London and the South East and the Midlands, respectively, expressing optimism. This compares to 82% in the North and Scotland and 79% in the South West and Wales.

Profession specific findings

Accounting and finance hiring

Finance and accounting recruitment continues to outpace the average with one in three (34%) CFOs planning to expand their permanent headcount, up from 28% in the first half of the year. More than half (55%) will be maintaining levels and only 2% anticipate employee reductions before the end of the year. Nearly nine in 10 (87%) find it challenging to find skilled financial professionals today with the most challenging areas including accounting, business / financial analysis, financial management / control and compliance. As a result, nearly eight in 10 (79%) are concerned about losing key staff.

Financial services hiring

The financial services sector will lead the way in job growth ahead of other professional occupations finds the Index. Nearly four in 10 (39%) executives anticipate staff augmentations, up eight points from 31% six months ago. The areas of demand include accounting and finance (72%), operational support (69%), risk (33%), revenue-generating (31%) and compliance (23%). Nearly all (99%) express challenges in finding skilled professionals, indicating that talent shortages exist despite media reports about the sector and it is therefore not surprising that 95% are concerned about retaining their top performers. In order to entice existing employees to stay, nearly half (46%) will be increasing salaries and one in four (25%) will increase bonuses.

Hiring for other professional occupations

Job creation across other professional occupations is also trending upwards with nearly three in 10 (29%) anticipating additional hiring, up from 22% six months ago. Nearly six in 10 (59%) directors expect to maintain current levels by backfilling vacated roles and only 3% plan to reduce headcount. Recruitment challenges persist with nine in 10 (93%) expressing difficulty sourcing the requisite talent and 84% are concerned about losing key staff. More than three in 10 (34%) plan to increase salaries and one in five (19%) will be raising bonuses.

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