Reliance on agency workers increases as confidence in economy drops

The research founding a lack of engineering and technical candidates a continuing concern.
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UK employers are increasingly likely to hire agency workers amid continuing falls in confidence in the economy, according to the research published today.

When asked about economic conditions in the country as a whole 13% of employers said they were getting better, while 44% believed they were getting worse, a net difference of -31 percentage points; 57 percentage points lower than in June 2016.

The more positive figures on hiring for temporary workers suggest that many businesses are turning to agency work to help them navigate the unpredictability they currently face. This might be driven by waiting to see whether permanent hiring is justified, or by using additional labour to meet demand rather than making big capital investments” – Neil Carberry, REC

In view of the economic outlook, employers expected confidence in hiring and investment decisions, 23% said it was getting better while 27% believed it was getting worse.

The JobsOutlook survey by the Recruitment & Employment Confederation (REC) found that the balance of sentiment for hiring agency workers in the short-term was 10 percentage points higher than the previous month at +3 net.

Neil Carberry, REC chief executive, said: “These figures emphasise again how Britain’s fantastic jobs market supports prosperity, given an uncertain economic outlook and lower business investment. Firms are only marginally less confident in hiring for themselves in today’s survey – and far more positive than they are about the wider economy. Given recent political events, these figures are remarkably robust.

“The more positive figures on hiring for temporary workers suggest that many businesses are turning to agency work to help them navigate the unpredictability they currently face. This might be driven by waiting to see whether permanent hiring is justified, or by using additional labour to meet demand rather than making big capital investments. In the long run, however, employment will be best supported by the stability a clear Brexit outcome will bring. It’s time to get on with delivering this.”

Following this quarter’s improvement in anticipated demand for temporary workers, one third (34%) of employers intending to hire temporary workers expressed concern over the availability of agency workers with the necessary skills.

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Almost half (46%) of UK employers expressed concern about the availability of permanent-hire candidates, with a lack of engineering, technical, health and social care workers continuing to cause most concern.

Four in five employers (83%) plan to offer training opportunities to upskill their staff in 2019 in order to increase productivity.

“The delay to Brexit has given firms breathing space, and anecdotes from recruiters suggest that the jobs market has improved in the past few weeks,” added Carberry.

“Building on this trend needs a deal – but it also needs action to address key staff shortages in some sectors. Employers are leading the way in addressing this, with the survey showing increasing activity on both training and inclusion. But government can help this process by reforming the apprenticeship levy into something that benefits all workers, through a flexible training levy approach.”

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