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Skills shortages “cast a shadow” over employment outlook, says REC’s Tom Hadley

More than eight in ten (82%) employers think economic conditions are improving and more than four in ten (43%) will approach future hiring decisions with greater confidence, according to the latest JobsOutlook survey by the Recruitment and Employment Confederation (REC).     


An optimistic outlook caps a year of positive news for many businesses and employees. The proportion of employers reporting they have a ‘considerable’ amount of spare capacity has remained static at 0% throughout 2015, whilst the proportion of businesses reporting to have carried out redundancies in the preceding 12 months has fallen from 9% at the end of 2014 to 5% in the final report of this year.  


Continued growth in hiring looks set to characterise 2016, with 86% of employers saying they will take on more permanent staff in the next three months, and 78% saying that hiring is on their agenda for the medium term. With unemployment at the lowest rate since January 2006 (5.2%), however, and vacancies at a record high (747,000), according to the latest ONS data, employers may find it increasingly difficult to recruit for new roles. The latest JobsOutlook report highlights technical/engineering, professional/managerial, driving/distribution and construction as skills that are especially hard to find.    


REC director of policy, Tom Hadley, said, “2015 has been a vintage year for the labour market. Employers are confident, hiring has been steady and pay has increased for many people as the benefits of economic growth filter through. The outlook for 2016 is similarly rosy, with many private sector businesses seeking to build upon a successful year by expanding their capacity to take on more work, and also by improving productivity. This should mean even more opportunities for people with the right skills. 


“Although the overall outlook is upbeat, major challenges are just around the corner. The introduction of the National Living Wage, uncertainty around the EU referendum outcome, and skills shortages that are getting worse in many industries all have the potential to knock employers off their stride. Public sector services such as education and healthcare are already finding it extremely difficult to bring in the people they need. The challenge of ensuring that the demand for staff is met by the supply of suitably skilled candidates casts a shadow over the forecast for 2016.” 


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