UK employers are continuing to kick major hiring and firing decisions into the long grass with latest data from the ManpowerGroup Employment Outlook Survey showing that four out of 10 (42%) of organisations plan no changes to their employee headcount over the second quarter of this year.
Of those employers who do expect a change in headcount, the survey found that planned hiring volume is down 27% on the quarter, with many businesses holding back on recruiting until they have taken full stock of next month’s cost increases.
“Because of this we’re anticipating the UK’s hiring recession will remain an issue until summer at the earliest,” said Michael Stull, managing director of ManpowerGroup.
“With less hiring taking place, many employees are understandably reluctant to consider changing roles,” he added. “Given this, employers must prioritise workforce optimisation and internal mobility. Offering opportunities to upskill and finding ways to keep teams motivated and energised will drive much-needed productivity during this period of stagnation.
“As widespread caution continues to stifle decision-making, employers will need to treat the workforce as they would in an economic recession; they must look at driving productivity within their workforce for the rest of the year.”
While the overall labour market remains stagnant, the energy & utilities sector is reporting the most movement, with only 27% of employers planning no change to their headcount in Q2. The figure for the IT sector is 35%, and 37% for finance & real estate.
Of those industries that are reporting planned changes to headcounts in the coming quarter, ManpowerGroup anticipates a significant reduction (-27%) in hiring volume for the whole of the UK. However some industries bucking this trend and forecasting increases in hiring, notably industrials & materials, real estate and transport & logistics
The survey also notes that with public sector recruitment up, there are questions about when investment into areas including the increase in national defence expenditure and plans to drive up housebuilding, will have a knock-on impact for businesses in the private sector.
Stull concludes: “For the time being, economic uncertainty and cost pressures remain a real issue for many employers as the negative sentiment, alongside flat consumer spending and growing insolvencies all adds to a sense there is only so much more they can do. It’s likely they will continue to hold tight until we’ve seen the full impact of next month’s tax rises. Therefore we urge those who can, to navigate the uncertainty and find new solutions to drive productivity and efficiencies. They will likely reap the rewards later in the year when it is hoped the market will stabilise and improve.”
The Manpower survey is released every three months to measure employers’ intentions during the next quarter and is used as a key economic indicator by both the Bank of England and UK Government.