Employers will reduce the rate at which they hire in the first quarter of the New Year, according to the latest Manpower Employment Outlook Survey.
The six percentage point dip in hiring confidence for January to March represents the single largest quarterly fall in hiring plans in the last six years and takes the Net Employment Outlook¹ for the first three months of 2008 to +7%, a six year low.
Mark Cahill, Managing Director of Manpower UK, says: “The credit crunch, concerns about interest rates and house prices have been talked about for some months, making for a more uncertain time for both employers and employees, and these concerns appear to be reflected in hiring expectations. However, it is important to note that the overall picture remains positive – hiring growth is easing but there are still more employers taking on staff than reducing headcount.”
The figures released today in the Manpower Employment Outlook Survey, a quarterly study of over 2,000 UK employers’ hiring trends covering the January-March 2008 period, reveal a cautious labour market. 13 per cent of employers plan to take on more staff, six per cent intend to make headcount reductions and 80 per cent expect to make no changes to staffing levels, giving a Net Employment Outlook of +7%. When seasonal variations are removed from the data, the Outlook improves to +10%.
Hiring confidence among employers in the Finance & Business Services sector – the most consistently strong performing sector in recent years – has eased by a significant 12 percentage points over the fourth quarter of 2007 and by 16 points over the year.
Employer confidence in the Construction sector is a downbeat -5%, although the majority of employers in the sector (80%) are predicting a period of stability, and report no change in headcount.
Quarter 1 hiring confidence is strongest amongst employers in the Utilities sector who report an Outlook of +17% – a considerable increase of 15 percentage points on the quarter but a slight easing of four percentage points over the year.
Mark Cahill comments: “As a business we are seeing continued investment and growth by our utilities clients, particularly for customer service and sales positions in contact centres. The increasing number of companies onshoring their contact centre operations to the UK may explain why we are seeing such positive hiring activity in this sector.
“However, the additional demand for experienced workers is contributing to the continuing UK skills shortage as companies struggle to recruit workers to fill these positions. The challenge for employers in this sector in 2008 is to recruit and hold onto the right people.”
Employers in the Manufacturing (+12%), Community & Social (+11%), Finance & Business Services (+11%) and Transport & Communications (+10%) sectors report figures above the national average. Hotels & Retail sector employer confidence (+1%) has decreased by five percentage points over the last quarter and is down by one percentage point over the year. Employer confidence in the High Street sub-sector (+5%) is weaker by three percentage points on the same time last year but up by one point on last quarter.