HR · 21 September 2017

Employers remain resilient in face of falling business confidence

Underqualified staff
Employers are posting staff vacancies at the fastest rate for two years, despite business confidence in the economy falling

As new research shows business confidence in the economy falling at a considerable rate, employers continue to hire in all directions, according to new findings.

A study from the Federation of Small Businesses (FSB) revealed small business confidence at its lowest level since the EU referendum in June 2016. Some seven in ten owners were struggling against rising operational costs, while a record one in eight founders were expecting to either downsize or sell their business.

However, research from the Recruitment & Employment Confederation (REC) has proved that despite falling faith in the economy, hiring had remained positive, sitting at the same ten per cent growth rate in September as in August.

Hiring intentions were also stable, with a fifth planning to increase headcount of permenant staff through the remainder of 2017.

REC research also confirmed the importance of short-term agency workers to business growth plans. Almost six in ten employers said such recruitment was important in responding to increased demand.

Commenting on the positive findings of the REC’s latest JobsOutlook survey, chief executive Kevin Green praised strong labour market activity.

“Employers are showing a great deal of resilience as they continue to hire despite a growing number losing faith in the direction the economy is heading,” Green said.

“The political climate isn’t helping the situation. Businesses need clarity in order to plan effectively and so far the Brexit negotiations have not resolved any of the core issues.”

With further research suggesting a competitive autumn ahead for employers, pushing up salaries in the fight for skilled workers, Green urged the government to secure a post-Brexit migration arrangement that enables small businesses to grow.

“Employers are worried about how they will fill vacancies in the future. There are now just 1.9 unemployed people for every vacancy, and net migration from the EU is falling, which means the pool of people available to employers is shrinking.

“Businesses can only grow if they have access to the people and skills they need. With party conference season in full swing, we urge politicians of all sides to heed the warning signs and create clarity for business. That means making progress in the ongoing Brexit negotiations.

“An early agreement on the settlement of EU nationals already working in the UK would be a step in the right direction. The vast majority of EU nationals residing in the UK come here to work and make a valuable contribution to our economy.”

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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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