Employer demand for temps has risen amid concerns about the UK economy, which has been in recession since the last three months of 2023.
In response to this higher uncertainty, hiring intentions for agency workers in the short term has risen significantly according to the Recruitment and Employment Confederation’s JobsOutlook. Greater use of temporary work is a typical employer response to economic conditions such as these, it said.
The Office for National Statistics said output fell in all three sectors of the economy – services, production and construction – in the final quarter of 2023. A deeper recession was prevented only by a rise in government spending.
Services declined by a milder 0.1% compared with a 0.2% fall in the first estimate, but without making a difference to the overall decline in the wider economy, the ONS said.
Labour market news
Significant fall in February job postings
Businesses will be priced out of international talent by new immigration rules
UK vacancies fall below one million for first time in two years
Britain’s trade declined and household consumption also fell despite a fall in inflation towards the end of 2023.
Despite this unpromising backdrop, the REC said that while companies were strongly negative in outlook (at -40 points) there had been a trend for marginally growing confidence. This had reversed this month: when assessing employers’ confidence in making investment and hiring decisions for their own business, sentiment has fallen into negative territory for the first time since this time last year (net: -7).
Neil Carberry, chief executive of the REC, said there was a basis for believing that growth could return: “We are convinced there is underlying growth potential, as seen by the stronger February sentiment on permanent hiring intentions by comparison to the previous two months.”
Carberry added that the spring budget had fallen short of providing a clear industrial and workforce strategy. “No attempt to drive growth will succeed without a proper appreciation of workforce issues,” he said.
He said that given the scale of the growth of the temp market since 2020, some tapering in demand in 2023 was inevitable. But forecast demand for short-term agency worker hiring rebounded strongly (by seven points, to net +10 points) in this most recent three-month period.
At net +15 points, the UK-wide balance of employer sentiment towards short term permanent hiring was flat when assessed as a full quarter. But there was a notable uptick in February (net: +26), from net +10 in December and net +11 in January.
Latest HR job opportunities on Personnel Today
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Browse more human resources jobs
