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UK – HIRING CONFIDENCE REBOUNDS, DEMAND FOR TEMP STAFF RISES OVER THE YEAR

27th Feb 2020

UK – HIRING CONFIDENCE REBOUNDS, DEMAND FOR TEMP STAFF RISES OVER THE YEAR: REC

Employers’ confidence in making hiring and investment decisions increased in the period from November 2019 to January 2020, returning to positive territory, according to the latest JobsOutlook survey from the Recruitment and Employment Confederation.

The survey showed that employer confidence in making hiring and investment decisions improved by ten percentage points this quarter, returning to positive territory at net: +7.

However, when asked if they think economic conditions in the country as a whole are getting better or worse, 46% of employers said worse while 19% said better. Despite confidence being in the negative territory, it was still an improvement over the previous rolling quarter.

Meanwhile, demand for permanent staff remains high, both in the short and medium term, at net: +21 and net: +26, respectively. Businesses are looking to expand their workforce after months of uncertainty and delay.

Demand for temporary agency workers fell back into negative territory this quarter when compared to the previous rolling quarter. However, short-term and medium-term levels were higher than in the same period a year earlier.

“Large employers especially have become more negative about hiring temps, perhaps due to the administrative burden of the upcoming IR35 changes,” the REC stated.

The REC also found that more employers highlighted the importance of agency workers for responding to growth (up from 57% to 69%) and for managing organisational change (up from 54% to 68%) compared to a year earlier.

Seven in ten (71%) employers who hire agency workers said that it is important that their recruitment agency partners provide information on how to manage your temporary workforce as a service.

REC’s survey also showed that approximately half, or 49%, of employers of permanent staff are already worried about finding enough candidates to fill their permanent vacancies.

“These worries are especially pronounced in sectors like health and social care and construction, industries where the government’s new immigration policy will have serious negative consequences for allowing labour into those sectors,” the report stated.

Tom Hadley, Director of Policy and Campaigns at the REC, said, “Businesses across the country have grown more confident since the election. With more certainty about what lies ahead in the short term, many have taken the opportunity to start hiring again. Now that demand for staff is on the rise and the majority of employers have little or no spare capacity in their workforce, staff availability is the major challenge.”

“As a result, last week’s immigration policy announcement has worried many employers. Sectors like healthcare, construction and logistics currently rely on workers from overseas, and are already facing labour shortages. Although the government might refer to these roles as ‘low-skilled’, they are highly important – not just for employers but also for patients, consumers and existing staff who are already overworked. We need a temporary work visa that allows businesses to hire the people they need at all skill levels and pay grades.

Skills shortages still affecting UK Businesses

25th Feb 2020

Bedfordshire Chamber of Commerce reports:

Over half of UK firms attempted to recruit in the last quarter of 2019, but almost three quarters have struggled to find the right talent, the largest survey of UK employers has found.

• Labour market remains stable as over half (55%) of UK businesses attempted to recruit in the final quarter of 2019.
• Skills shortages continue to impact growth as 72% of firms reported recruitment difficulties in Q4 2019.
• With greater political stability, one in four (26%) businesses expect to increase their workforce in Q1 2020.

The latest Quarterly Recruitment Outlook from the British Chambers of Commerce, in partnership with Totaljobs, revealed continued skills shortages in the UK workforce ahead of the government’s first Budget next month.

While over half of UK firms (55%) were looking to hire, the report revealed that 72% of businesses had difficulty finding the right talent.

The figures illustrate a critical skills deficit across the UK workforce, with shortages most apparent in the construction and hospitality sectors, with 79% and 77% respectively struggling to recruit. Two thirds (67%) of construction businesses attempted to recruit in Q4, up from 62% in Q3. In both these sectors – and others – uncertainty over the UK’s future immigration regime continues to be a concern.

Looking ahead, 26% of UK firms say they plan to increase their workforce in the first quarter of 2020. The construction industry reports the highest proportion of firms looking to grow their headcount (34%).

The report’s findings highlight the need to address critical skills shortages in the upcoming Budget, including commitments to long-term funding for vocational education and for apprenticeships in small and medium-sized businesses – both of which are crucial to the government’s ambition to ‘level up’ opportunities across the UK.

BCC and Totaljobs are also calling on the government to review the Apprenticeship Levy, which hits every firm with a payroll of over £3m, to ensure companies can use the funds to train their staff. Greater flexibility for employers on how funds can be used towards vital non-apprenticeship or accredited training could help to make better use of this budget and upskill the UK workforce.

Adam Marshall, Director General of BCC, said:

“Although it is encouraging that businesses are looking to take on people, the prolonged skills shortages they’re facing are not sustainable as they try to shake off years of political uncertainty and pursue growth.

“Training has got to be at the heart of the upcoming Budget if the government wishes to demonstrate that it is serious about ‘levelling up’ opportunity all across the UK. Funding boosts are needed for vocational and technical education, for apprenticeships, and for incentives to help more employers provide high-quality job-related training.

“As the UK forms new economic relationships with the EU and partners across the world, businesses also need clarity on who they can recruit. As things stand, businesses don’t know who they can hire, and under what conditions, from New Year’s Day 2021. That’s unacceptable. The Government needs to act swiftly to deliver a fast, flexible new immigration system that allows firms to access staff at all skill levels, and limits upfront fees, delays and costly red tape.”

Jon Wilson, General Manager of Totaljobs, said:

“The market is very much active and hiring intentions remain strong, with Totaljobs seeing 640,000 jobs advertised alongside over 12 million job applications in Q4 2019. Yet, skills shortages continue to impact many UK businesses, as one factor contributing to the UK’s low productivity rate.

“UK businesses need to ensure they have robust training opportunities to keep the people they need. Totaljobs research shows that two thirds of UK workers have left a job due to a lack of learning and development. Clearly, learning new skills is very much tied up in job satisfaction. For SMEs particularly, training budgets can be an issue, which is why dedication and support from the government is essential in order to help the UK workforce upskill.”

 

UK – NUMBER OF TEMPORARY EMPLOYEES DOWN 8.2%, UNEMPLOYMENT RATE FALLS

18th Feb 2020

The number of temporary employees in the UK fell by 8.2% on a seasonally adjusted basis to a total of approximately 1.42 million for the three-month period from October through December 2019 when compared to the same period a year ago, according to the Office for National Statistics.

Temporary workers are self-identified when surveyed by the ONS, and they include those who are on fixed-period contracts, temporary agency workers, casual workers, seasonal workers and others in temporary work.

The number of temporary employees as a percentage of total employment was 5.1%, down from 5.6% compared to the same period a year ago.

Compared to the previous period ended in November 2019, the number of temporary employees decreased by 2.5%.

Of the 1.42 million temporary employees during the period ended December 2019, approximately 361,000 were temporary because they could not find a permanent job; 396,000 did not want a permanent job; 112,600 had a contract with a period of training; and 551,900 cited other reasons.

Of the 1.42 million temporary workers, approximately 672,000 were men while approximately 749,800 were women.

ONS also published labour market figures for the three-months ended December 2019.

The UK employment rate was estimated at a record high of 76.5%, 0.6% higher than a year earlier and 0.4% up on the previous quarter. The highest employment rate estimate in the UK was in the South West (80.1%) and the lowest was in the North East (71.1%).

Estimates for October to December 2019 showed a record 32.93 million people aged 16 years and over in employment, 336,000 more than a year earlier. This annual increase was mainly driven by full-time workers (up 381,000 on the year to a record high of 24.42 million), women (up 298,000 to a record high of 15.61 million), and people aged 50 to 64 years (up 226,000 to a record high of 9.31 million).

The UK unemployment rate was estimated at 3.8%, 0.2% lower than a year earlier and 0.1% lower than the previous quarter. The highest unemployment rate estimate in the UK was in the North East (6.1%) and the lowest was in Northern Ireland (2.4%).

The UK economic inactivity rate was estimated at a record low of 20.5%, 0.4% lower than the previous year and 0.3% lower than the previous quarter.

Meanwhile, estimated annual growth in average weekly earnings for employees slowed to 2.9% from 3.2% last month for total pay (including bonuses) and to 3.2% from 3.4% for regular pay (excluding bonuses).

In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.4% and annual growth in regular pay is estimated to be 1.8%.

Job vacancy data showed there were an estimated 810,000 vacancies in the UK for November 2019 to January 2020; this is 50,000 fewer than a year earlier and 7,000 more than the previous quarter.

ONS deputy head of labour market statistics Myrto Miltiadou said, “Employment has continued its upward trend, with the rate nudging up to another record high. In particular, the number of women working full-time grew strongly over the past year. The number of job vacancies has also increased on the quarter, after falling for most of last year.”

Jobs market shows signs of improvement as 2019 ends

30th Jan 2020

Jobs market shows signs of improvement as 2019 ends

The latest KPMG and REC, UK Report on Jobs showed that hiring conditions improved at the end of 2019. Permanent staff appointments rose for the first time in a year, while temp billings growth picked up from November. According to panellists, some firms had approved new hires following a long period of delayed decision-making and rising business requirements. However, rates of expansion were notably weaker than seen on average over the survey history.

At the same time, demand for staff continued to increase at a relatively sluggish pace, with vacancy growth stuck near a decade low. Lingering uncertainty related to Brexit, alongside generally tight labour market conditions, fed through to a further marked fall in candidate numbers. As a result, starting pay rose for both permanent and short-term staff, and at slightly quicker rates than in November.

December’s data signalled the first rise in permanent staff appointments for a year, though growth was only modest. The upturn was linked to higher business activity, the commencement of previously delayed hiring plans and the upcoming IR35 legislation changes. Concurrently, temp billings also rose modestly at the end of the year.

Although growth of demand for staff strengthened slightly from November, the rate of expansion remained close to a decade-low and was modest overall. While permanent vacancies rose at the quickest pace for three months, growth of demand for temp workers softened since November.

The number of people available for new roles continued to decline sharply in December, despite the rate of deterioration softening since November. Recruiters often blamed lower candidate availability to lingering uncertainty and skill shortages. Permanent staff supply contracted at a quicker pace than that seen for short-term workers.

Starting pay rose further for both permanent and temporary staff at the end of the year, with rates of growth picking up from November’s recent lows. Though sharp overall, the increases in starting salaries and temp wages remained among the softest seen over the past three years, however.

Commenting on the latest survey results, Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said:

“After the uncertainty of 2019, there are some signs of a clearer outlook for hiring in today’s survey. With a new government in place and the path ahead looking more predictable, some businesses have decided that they have waited long enough. The first increase in permanent placements for a year should give encouragement to both recruiters and employers – let’s hope this is a sign of positive things to come.

Permanent placements slow as uncertainty hinders hiring decisions

12th Sep 2019

The latest KPMG and REC, UK Report on Jobs indicated that labour market conditions softened in August. Permanent placements fell at the quickest rate for over three years as many employers chose to postpone staff hiring amid heightened political and economy uncertainty. Temp billings growth meanwhile remained stuck close to a 75-month low.  Total demand for staff rose at the weakest pace since the start of 2012, with both permanent and temporary vacancies rising at softer rates. An uncertain outlook also weighed on candidate numbers, as many people were reluctant to seek new roles in the current climate. However, the latest reduction in staff supply was the least marked for over two-and-a-half years. Starting pay for permanent and short-term workers consequently rose at softer rates.

Recruitment consultancies signalled that the number of people placed into permanent job roles dropped for the sixth month running in August, as many firms delayed hiring decisions due to Brexit-related uncertainty. At the same time, temp billings continued to rise only marginally. August’s data also signalled the slowest increase in total job vacancies since January 2012. Growth of demand eased for both permanent and temporary staff, with the former expanding at the slowest rate for seven years and the latter at the softest pace for a decade. Starting salaries for permanent workers continued to rise in August amid reports of greater competition for staff. Though sharp, the rate of inflation was the slowest recorded since December 2016. Meanwhile, temp pay growth edged down to a five-month low.

Although overall candidate availability deteriorated at the slowest pace for 32 months in August, the reduction remained much quicker than the historical trend. The fall was led by a further steep decline in permanent candidate numbers, as temp labour supply fell modestly.

Regionally, the Midlands, North and South of England all saw marked declines in permanent placements. Notably, it was the first reduction seen in the North of England for six months. London bucked the overall trend and saw a slight rise in permanent staff appointments in August. Temp billings growth was relatively muted in the North and South of England, while billings broadly stabilised in the Midlands. In contrast, London recorded a renewed fall, albeit only marginal.  Softer increases in vacancies were seen in the private sector, while public sector staff demand remained lacklustre. Private sector permanent vacancies rose at the softest rate since January 2012, while growth of demand for temp staff eased to a 79-month low. In the public sector, permanent staff vacancies fell again, and temp staff demand rose only modestly.

Commenting on the latest survey results, Neil Carberry, REC Chief Executive, said:

“Today’s figures are a sobering reminder to politicians of all parties that national prosperity relies on businesses creating jobs and growing careers. Britain’s record on jobs is world-leading. It’s a key part of our economic success, with recruiters at the forefront of it. And there are still great opportunities out there for those looking for a new job and a boost in earnings.”

Wage growth tops expectations as unemployment falls again

11th Jun 2019

Wage growth tops expectations as unemployment falls again

Latest figures from the Official for National Statistics (ONS) show above forecast wage growth in the three months to April. Pay rose by 3.4% compared with a year ago. After taking inflation into account, wage growth was 1.4%.

The news accompanied another fall in unemployment which dropped by 34,000 to 1.3m in the three months to April. The unemployment rate remained at 3.8% and has not been lower since the October to December 1974 period, the ONS said. The number of people in work increased by 32,000 to 32.75m. The employment rate for women was 72%, the highest on record.

The rise in employment was the weakest since August and was significantly down on the average 167,000 recorded in the first quarter, although it continued to show that the UK jobs market was defying the worst fears over Brexit.

John Hawksworth, chief economist at PricewaterhouseCoopers, said: “The rate of increase in the latest three months was slower than in most previous quarters, which may be a sign that Brexit-related uncertainty is beginning to make companies more cautious about new hiring.”

John Philpott of the Jobs Economist consultancy said the rise in employment masked a drop of 38,000 in the number of workers employed by a company, with self-employed people accounting for the entire net rise. “A closer look at the figures offers a slightly different story,” he said.

Tej Parikh, chief economist at the Institute of Directors, said: “The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.”

“However, the employment boom cannot last forever, and is certainly showing signs of softening.”

Demand for temporary workers in the UK softens

20th May 2019

Demand for temporary workers in the UK softens

The number of temporary employees in the UK fell by 3.7% on a seasonally adjusted basis to 1.52m n the three-months from January through to March 2019 when compared to the same period a year ago, according to official figures.

The Office for National Statistics reported that the number of temporary employees as a percentage of total employment was 5.5%, down from 5.8% compared to the same period a year ago. Compared to the previous period ended in January 2019, the number of temporary employees also saw a decrease of 1.1%.

Of the 1.52m temporary employees during the period ended March 2019, approximately 387,200 were temporary because they could not find a permanent job; 451,000 did not want a permanent job; 131,000 had a contract with a period of training; and 558,800 cited other reasons.

The report also found that despite rising recruitment and retention pressures, median basic pay expectations in the 12 months to March 2020 remain at 2%. However, pay expectations have fallen back in the private sector from 2.5% to 2% and have risen in the public sector from 1% to 1.5%.

UK unemployment hits 45 year low

16th May 2019

UK unemployment hits 45 year low

Official figures show that unemployment in the UK is at its lowest level for 45 years. The Office for National Statistics (ONS) said the number of people out of work in the past three months has now been falling for five years and is now at 3.8% – lower than at any time since the end of 1974. Employment also jumped by 99,000 in the three months to March, to 32.7m with the number of people working now the highest on record at 76.1%.

The number of people in work continues to reach near record levels as fewer women retire between the ages of 60 and 65, new figures reveal. Unemployment fell by 65,000 to 1.3m, continuing a general trend which started in early 2012.

Average earnings increased by 3.2% in the year to February, compared with 3.5% on the previous month while the number of economically inactive people in the UK fell by 23,000 in the latest quarter to 8.6m, a rate of just under 21%, one of the lowest on record. The number of vacancies fell by 16,000 to 846,000.

The UK’s employment rate of 76% is at a joint record high, while for women it has reached the highest on record at 71%. The increase is partly due to changes in the state pension age for women, resulting in fewer retiring between the ages of 60 and 65, the ONS said.

The number of people in work has increased by 354,000 over the past year, entirely due to full-time employment. Part-time working fell by 18,000 to 8.5m, while self-employment increased by 180,000 to just under 5m.

Record numbers in work – ONS

22nd Jan 2019

The UK labour market remained robust in November according to the latest figures from the Office for National Statistics (ONS) with the number of people in work reaching a new high of 32.54m.

Significantly, the data also showed a sharp increase in average earnings, (including bonuses) which rose 3.4% y/y, the biggest increase since July 2008 and higher than October’s 3.3%. Adjusting for inflation, which fell to 2.3% in November, average pay increased by 1.1% in real terms.

Unemployment was flat, with a small increase of 8,000 between September and November for a total of 1.37m with the number of job vacancies up 10,000 to 853,000. The unemployment total is 68,000 lower than a year ago, with the jobless rate 0.2% down on this time in 2018.

ONS head of labour market David Freeman said: “The number of people working grew again, with the share of the population in work now the highest on record.

“Meanwhile, the share of the workforce looking for work and unable to find it remains at its lowest for over 40 years, helped by a record number of job vacancies.

“Wage growth continues to outpace inflation, which fell back slightly in the latest month.”

Howard Archer, the chief economic adviser to the EY Item Club, said the increase in earnings growth indicated that the “tight labour market is pushing up pay – after suffering a relapse earlier in the year”.

But he warned that while employers were increasing pay to recruit staff during a period of skills shortages, workers already in a job were finding it more difficult to secure an inflation-busting rise.

UK businesses wary of EU exit – ICAEW

15th Jan 2019

UK businesses remain concerned about the UK’s future outside the EU and caution that it could lead to lower economic growth, according to a report by the ICAEW.

 

The survey found that 69% of senior business professionals, who are also chartered accountants, expect uncertainty surrounding the UK relationship with the EU which could affect them negatively. Of the 501 people surveyed, 67% fear lower UK economic growth will hurt their business, while 63% fear a slowdown in the global economy.

 

Moreover, 58% of businesses were unsettled by the lack of clarity on longer-term business priorities from the government. Large businesses were the most negative with 62% of them feeling more pessimistic, compared to 51% of small businesses.

Rising inflation worried 62% of large businesses and 54% of SMEs, while availability of skilled workers concerned 54% large businesses and 43% SMEs. Uncertainty created by a possible change of government worried 56% of the leaders surveyed, while 38% said this would have little or no impact.

Meanwhile, 54% of businesses said possible regulatory changes under a different government could hurt their business, while 24% said it would have little or no impact.

Michael Izza, ICAEW chief executive, said, “We know that the uncertainty around Brexit continues to impact our members and the businesses they advise. This is the busiest time of year for companies in terms of financial reporting and planning for the year ahead.

“As 29 March looms large, contingency planning is no longer a theoretical exercise, businesses can’t kick the can down the road. They have to make decisions now about jobs, stock levels and supply chains, incurring significant and possibly unnecessary cost.

“We need our parliamentarians to listen to the real concerns of business and find a way forward that avoids a disorderly exit from the EU and provides some much needed clarity,” he added.