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UK hiring bounces back despite grim medium-term outlook

By Dawn Gibson



UK hiring activity is picking up after the biggest rise in temporary placements in almost two years, despite extremely uncertain market conditions.



The threat of a second wave of Covid-19, combined with the UK’s pressing need to strike new trade deals and the end of the government’s furlough scheme next month are all factors contributing to corporate reluctance to commit to hiring plans – but there are several positive signs emerging from fresh data.



The latest KPMG and REC, UK Report on Jobs survey shows temporary billings expanded at the quickest rate for 20 months during August, although permanent placements rose only slightly.



All English regions except London recorded higher temporary billings, with the steepest increase in the South of England. Temporary vacancies increased across three out of ten monitored sectors, with blue collar positions accounting for the strongest rate of expansion.



The study coincides with the release of the results of the ManpowerGroup Employment Outlook Survey, conducted in July, which canvassed more than 38,000 employers in 43 countries.



Employers around the world have become increasingly pessimistic about the rate of labour market recovery. When asked in April, more than half expected the market to bounce back by April 2021 – but in the latest survey, less than a third are still confident this will happen. One in five respondents took a much gloomier view, stating they did not think the market would ever get back to normal.



In what is a sign of hope for many, six out of 10 employers said they would bring furloughed workers back full-time, while 19% said they would bring workers back on reduced hours. One in ten said they would not bring all their workers back, and 12% are undecided.



UK employers anticipate a weak yet improved hiring pace in the next three months, reporting a Net Employment Outlook of -8%. Hiring intentions increased 4% from the previous quarter.



KPMG vice chair James Stewart says it is positive to see an uptick in hiring activity in their latest figures, which could mark a turning point with businesses appearing more willing and able to hire as more parts of the UK economy re-open.



“But with total candidate availability rising at a near-record pace, strong and sustained rises are needed to move the UK jobs market back to levels seen pre-Covid – and with concerns around a possible second wave of infections, the winding down of the furlough scheme and a Brexit deal outcome, there are still many challenges ahead,” he warns.



Jonas Prising, ManpowerGroup chairman and CEO, predicted a two-speed recovery, with industries such as manufacturing, professional services and construction rallying while others like hospitality and travel are impacted for the long-term.



“Though the full impact of various job-retention schemes introduced to support workers remains to be seen, we can be certain that helping people adapt from declining industries to growth roles will be critical,” he says. “It is the responsibility of business, government and educators to support people with swift, targeted upskilling programs so that value creation is shared with the many, not just the few."



In related labour market news, the UK’s attractiveness to foreign workers is on the rise – but UK workers are not as keen to venture abroad.

Searches by overseas workers for UK jobs have soared to their highest level since December 2018, analysis by leading international job site Indeed reveals, rebounding by 140% since the all-time low set during lockdown. The Indeed analysis found India accounted for the biggest share of international searches, followed by the US and Ireland.



However, as inbound searches have risen, outbound searches by British workers looking for roles overseas have collapsed to their lowest level since August 2017 – an indication of workers’ unwillingness to add a foreign posting to their CV at a time when overall uncertainty is already at such heights.


Photo courtesy of Canva.com

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