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UK – Employer confidence reaches a new high

23 April 2014

The planned use of agency workers over the next quarter rose again during April, with the number of organisations intending to increase their use of agency workers in the next three months rising by +4% compared with the previous period, according to the latest Jobs Outlook from the Recruitment and Employment Confederation (REC).

Three quarters (75%) of employers intend to slightly increase the number of permanent employees in the next three months. Only 7% forecast a need to slightly decrease headcount. No employer indicated that they would have to greatly decrease their permanent employee headcount in the next quarter.

Almost half of employers (48%) also signalled positive intent to use more agency labour in the next four-to-12 months. Only 4% of respondents advised that they intend to slightly decrease the number of agency workers they use, while none indicated that they would greatly decrease their use of agency workers.

In the medium term, only 2% of employers plan a slight decrease in permanent headcount, with none intending at present to greatly decrease their workforce in the next four-to-12 months. 

Two out of the top three categories of anticipated shortfall amongst agency workers mirror permanent skills shortages. It is apparent that the UK is facing an acute shortage in readily available technical/engineering skills. Concern over the sufficient availability of agency drivers and distribution workers peaked again this month, highlighting the heaving reliance within manufacturing and logistics upon contingent resources.

Total employment remained above 30 million in March, an increase of 239,000 compared with the previous quarter and an increase of 691,000 compared with the same period last year. Self-employed numbers topped the 4.5 million mark for the first time and now constitute 14.8% of total employment. This figure is +3.3% up on the previous quarter and +7.1% up on the same period last year.

The proportion of employers with absolutely no spare capacity to absorb more work, should it come their way, climbed to 32%, underpinning all aforementioned intent to add more permanent and contingent resources.

Recruiters, however, should be aware that there has been a slight drop in the satisfaction levels employers have felt with recruitment agencies. This may be due to challenges of rising hirer demands, which place pressure on the recruitment community. Even with extensive networks to seek out high calibre, passive candidates, the realisation is beginning to hit home that the UK workforce simply does not contain sufficient skills. 

Commenting on the report the REC’s chief executive Kevin Green said: “Employer confidence is returning and hirers are keen to make offers of permanent work to more and more people. Small businesses are the backbone of the UK economy and surging confidence among small employers can only be good news for jobseekers and the recovery.”

“Being able to access high quality flexible staff to meet variations in demand has been vital to British businesses during the downturn.  Now we see that the majority of employers who are using flexible resource are doing so to fill talent shortages. As scarcity of skills continues to be an issue in key sectors like IT, engineering and logistics, contractors, interim managers and agency workers are becoming more important than ever to help businesses quickly access the skills they need to stay competitive,” Mr Green concluded.