Global hiring plans are set to cool off heading into summer, according to the latest ManpowerGroup Employment Outlook Survey of nearly 39,000 employers in 41 countries for the third quarter.

The research is based on survey responses fielded from 3-28 April 2023. The Net Employment Outlook (NEO) is 4% lower than this time last year suggesting that economic headwinds are starting to impact employers’ hiring expectations. Overall, the NEO stood at 28%, which was up 5% on the previous quarter.

The NEO is calculated by subtracting the percentage of employers who anticipate reductions in staffing levels from those who plan to hire.

ManpowerGroup’s data showed that 43% of employers plan to hire in Q3, while 15% expect a staffing decrease, 39% plan to keep workforce levels steady and 3% are undecided.

The Survey found that for Q3 the most optimistic hiring outlooks are reported by organisations in Costa Rica (43%), the Netherlands (39%), and Peru (38%).

On the other hand, employers in Argentina (6%), Slovakia (10%), Austria (11%), and Italy (11%) report the least optimistic outlooks.

Among the world’s largest economies, respondents in the US (35%), the UK (29%), Germany (28%), and France (21%) all plan to hire in the third quarter.

Across regions, employers in North America (35%) reported the strongest hiring intentions, followed by Asia Pacific (31%), Central and South Americas (29%), and EMEA (20%).

“This data suggests employers are planning more measured hiring for the quarter ahead as they navigate a range of local and macro level challenges from supply constraints to uneven consumer confidence and rising inflation,” said ManpowerGroup Chairman and CEO Jonas Prising. “That said, attracting and retaining business critical talent remains a priority, and our survey respondents around the world continue to be focused on hiring for in-demand roles.”

Global Talent Scarcity, which refers to employers who say they are struggling to find talent with the skills they need, stood at 77%, a 17-year high.

Organisations in the IT sector (39%) report the strongest outlook, followed by Energy & Utilities (34%). The least optimistic hiring plans are found in the Communication Services (22%) and Consumer Goods & Services (22%) industries.

Year-over-year, employers in 26 countries plan to hire fewer workers, with the NEO declining 4%. The biggest year-over-year declines are reported in Brazil (-19%), India (-15%), Argentina (-14%), Finland (-14%), and Ireland (-14%).

EMEA employers report a steady outlook for the third quarter (20%), with a moderate increase (2%) since last quarter, but still the weakest globally. Outlooks vary across the region. The weakest outlooks are in Slovakia (10%), Italy (11%), and Austria (11%). France and Italy report a weaker outlook compared to Q2, both declining 5%.

Employers across APAC anticipate increasing headcount (31%), further improving when compared to the previous quarter (4%) but slightly weakening year-over-year (-1%).

Australia (37%), India (36%), and China (35%) report the strongest outlooks. Most cautious outlooks were reported by employers in Japan (14%) and Taiwan (15%). Meanwhile, China reported the strongest outlook globally for Energy & Utilities (61%) while Singapore remains the leader in Financials & Real Estate (50%). When it comes to digital roles, Australia leads both regionally and globally (61%).

Across North America, employers remain the most optimistic in this region for the third quarter of 2023 (35%). Both the US and Canada expect hiring to be weaker compared to their forecast year-over-year, with both countries’ NEO decreasing 3%. Employers across Puerto Rico (35%), the US (35%), and Canada (34%) report increases in their outlooks compared to last quarter at 9%, 5%, and 8%, respectively.

In Central and South America, the regional outlook stands at 29%, increasing since last quarter by 2%. Employers in Costa Rica lead globally and regionally (43%), followed by Peru (38%), and Mexico (36%). The weakest labour market is seen by employers in Argentina (6%).