According to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC), 51% of UK employers anticipate skills shortages for permanent staff.

The REC’s latest survey of 600 employers also reveals that 30% of organisations are operating at full capacity, while a further 50% have only ‘a little’ spare capacity to meet any increase in demand.

“The UK jobs market is at a tipping point, with the decision over our EU membership making a difficult situation worse,” REC Chief Executive Kevin Green said. “Whilst hiring has slowed down in recent months, due in part to the Brexit question and global economic uncertainty, employers are telling us that finding candidates to fill vacancies is a difficult challenge.”

“A vote to remain in the EU could release pent up demand, with a mini hiring boom over the second half of the year,” Green said. “On the other hand, a vote to leave is likely to see employers abandoning projects, shelving new expenditure and implementing hiring freezes during a prolonged period of uncertainty. We also have major concerns about the impact Brexit would have on lower-paid sectors which rely heavily on workers from the EU, such as hospitality, healthcare and farming. It is difficult to see how an Australian points-based immigration system would meet the needs of businesses in these sectors when British applicants are already in short supply.”

More than seven in ten (72%) employers felt that domestic economic conditions were either getting better (48%) or remaining the same (24%) in the three months to May 2016, leaving 22% believing that conditions had worsened. As a result, for 77% of employers there was no change or an improvement in their confidence in making hiring and investment decisions.

The report also shows that 68% of employers say they will maintain their existing permanent workforce, while 20% expect to take on more permanent staff in the next three months.

In a similar picture to permanent hiring intention, 79% of employers plan to hold (65%) or increase (14%) agency worker numbers in the short-term. With a notable 15% of employers uncertain about their intentions, the next three months are set to be volatile in terms of the demand for and availability of work for agency staff. In the next 4-12 months, into the medium-term, 76% of employers plan to hold (65%) or increase (11%) agency worker numbers.

Employers flagged a shortage of candidates to fill permanent and temporary roles in areas such as engineering, technology, health and social care and hospitality. 

“We have heard a lot of rhetoric calling for low-skilled EU migration to be curtailed, but what we haven’t heard is a viable explanation of how employers and our public services would be able to make up for the short fall in workers if free movement was removed,” Green said.

For the full report, click here.