Employers concerned over stagnant recruitment market

Employers
are becoming increasingly worried about the future, according to this quarter’s
figures from the Recruitment Confidence Index (RCI).

The
index has continued to fall and now stands at 113 compared with 119 three
months ago, suggesting a drop in recruitment activity.

The
RCI is a quarterly survey of public and private sector employers that measures
expected changes in recruitment activity and business conditions over the
following six months.

Run
by the Cranfield School of Management, the Daily Telegraph and Personnel Today,
the latest figures – which also look at recruitment methods, skills shortages,
staff turnover and pay rates – show that employers are concerned about business
conditions and demand for their products and services.

Business
confidence is also falling, and has plummeted in the service sector over the
past nine months. A net figure of just 15 per cent of employers say they are
optimistic, compared with more than 70 per cent last summer.

However,
the real problems could lie with retailers. A closer look at the results show
that while communications, health and hotels are still reasonably buoyant about
the future, confidence among retailers has sunk to a net figure of minus nine
per cent.

Commenting
on the findings, Shaun Tyson, professor of human resources at Cranfield School
of Management, said: "There is a definite feeling of pessimism about the
economy, especially in the service sector, which had a reasonably buoyant 2002.

"We
need to put the figures in perspective, though – the research was carried out
just before war broke out with Iraq, and that was an issue for some
employers," he said.

"Recruitment
confidence is declining relative to a very high peak 18 months ago immediately
before the September 11 attacks on the World Trade Centre. This was a time when
demand was far too high – especially in the South East – and employers could
not recruit people for love nor money.

"These
results are not suggesting that employers are about to shed thousands of staff
and we are not facing the prospect of mass unemployment," he added.
"But nor are many employers about to expand."

The
spring 2003 figures show that employers expect to reduce their expenditure on
nearly all recruitment methods over the next six months. Spending on employment
agencies and consultancies look set to suffer a net drop in revenue. Only
commercial websites – still a relatively immature recruitment tool – are likely
to see any growth.

Similarly,
the outlook for regional and national press advertising expenditure is also looking
tough. However, newspapers continue to be among the most powerful recruitment
tools. Three in four employers who use them rate them as successful.

The
survey draws on responses from 1,236 public and private sector employers. They
range in size from 25 to 100,000 employees, with around 50 per cent having at
least 250 staff.

By Quentin Reade

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