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More employers look to hire permanent staff despite economic worries

20 April 2022

Story by
Alex Crowther, Senior Reporter, The HR World

Hiring

Employers’ confidence in the UK economy took a turn for the worse during the first quarter of 2022 as inflation reached its highest for 30 years.

In January-March 2022, employers reported worsening expectations for the UK economy, according to new data from the Recruitment and Employment Confederation (REC).

The REC’s measure of business confidence in the economy improved slightly in the New Year but then fell back to -11 in January-March, the same level as in October-December 2021.

Despite this, more employers remained positive than negative about their ability to hire.

The REC’s JobsOutlook survey found that UK businesses’ confidence in hiring was at +8 in January-March 2022.

This was one percentage point lower than in the last quarter of 2021.

In particular, employers’ intentions to hire permanent workers have spiked over the past three months, diverging from the economic outlook, reflecting challenges in filling vacancies.

Hiring intentions for permanent staff in the short term increased by nine percentage points to net: +28, quarter-on-quarter.

Medium-term hiring intentions also rose by seven points to net: +26.

Neil Carberry, chief executive of the REC, said: “Businesses are seeing tax rates and uncapped energy costs rise, as well as pressure on salaries from staff who are seeing their own bills go up.

“So it is no surprise that firms are more concerned about the outlook. But British firms are resilient and investment in staff and growth remain on the agenda when employers think about their own business.

“We expect to see employers’ hiring plans decouple further from their economic outlook over the coming months as they face a tight labour market.

“Firms will need to find new, creative ways to attract candidates, as well as keep hold of the talented staff they have. Recruiters will play a vital part in helping them to do so.

“More employers are switching their hiring intentions towards permanent staff, as the urgent need for contingency staff to cover Covid absences decreases. But temporary workers remain vital to managing uncertain and fast-changing markets

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