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CoronavirusLatest NewsRecruitment & retentionSkills shortagesTemporary employment

Employer confidence shredded by coronavirus crisis

by Adam McCulloch 27 Mar 2020
by Adam McCulloch 27 Mar 2020 Photo: Shutterstock
Photo: Shutterstock

The extent of the coronavirus’s impact on employer confidence has been underlined by new figures released today (27 March).

The Recruitment & Employment Confederation (REC) has reported that confidence fell by 22 percentage points between the 2nd and 22nd of March, the early stages of the national slowdown caused by the Covid-19 outbreak.

The net figure, published by the REC in its latest Jobs Outlook report, is now -23 according to REC, and was mainly triggered by a collapse in sentiment among small businesses. A similar decline was recorded concerning hiring and investment decisions, where confidence fell by 21 percentage points to net -5.

There is still life in recruitment, however, the REC has stated, with some employers  still looking to add to staff numbers in the short term. Forecast demand for temporary agency workers increased from net -2 in February to net +13 this month, with key supply chain businesses looking to pick up flexible staff to deal with the fast-changing landscape as the crisis began to unfold. More than half of businesses are now concerned by the lack of availability of agency workers with 52% recording anxiety over this, up from 35% in February.

Demand for permanent employees in the short-term remained positive at net +17, but with major differences between sectors; for example, demand was higher than average for technology workers (net +25) and drivers (net +22). Almost half (46%) of employers were concerned about the sufficient availability of workers for permanent hire. Health and social care, education and engineering organisations expressed particularly high rates of concern over skills.

REC chief executive Neil Carberry felt there were grounds for optimism in the figures: “It’s no surprise that this global pandemic has caused the UK’s labour market to stall. What we should remember is that this hasn’t been caused by economic problems – it’s a deliberate choice that we’ve made to protect businesses and our fellow citizens. When the storm passes we will bounce back, and quickly.

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“It has been great to see the government listen to us and others in taking bold measures to protect workers and businesses – but more needs to be done. Employers need access to government support very quickly so staff can be paid without unnecessary hurdles. We must also make sure that flexible workers are not left in the lurch – they are a vital part of the labour market, and must not be forgotten in the government’s support packages.”

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Adam McCulloch

Adam McCulloch first worked for Personnel Today magazine in the early 1990s as a sub editor. He rejoined Personnel Today as a writer in 2017, covering all aspects of HR but with a special interest in diversity, social mobility and industrial relations. He has ventured beyond the HR realm to work as a freelance writer and production editor in sectors including travel (The Guardian), aviation (Flight International), agriculture (Farmers' Weekly), music (Jazzwise), theatre (The Stage) and social work (Community Care). He is also the author of KentWalksNearLondon. Adam first became interested in industrial relations after witnessing an exchange between Arthur Scargill and National Coal Board chairman Ian McGregor in 1984, while working as a temp in facilities at the NCB, carrying extra chairs into a conference room!

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