- As global recruitment firm ManpowerGroup reports an increase in UK employer hiring confidence, why isn’t this ‘growth’ mindset translating into more net new jobs?
- Both employers and the Government share ambitions to grow but caution is stalling action
- Employers have one of two choices: either sit tight and do nothing or make strategic hiring bets now to better position themselves for future success
UK employers are indicating a growth mindset with an optimistic recruitment outlook for Q4 (October to November) 2024, according to newly released data by the global recruitment firm, ManpowerGroup.
The positive Net Employment Outlook of +28% - a measure of business hiring confidence – has increased by eight percentage points on the quarter and by two percentage points on the year. The Outlook is calculated by surveying more than 2,000+ UK-based organisations about their recruitment plans for the next business quarter.
While the growth in confidence is to be welcomed following pre-election political uncertainty, ManpowerGroup views the Q4 hiring sentiment with cautious optimism because the positive hiring intent is not yet translating into new jobs.
“The UK’s recruitment market is rather contradictory at present. On one hand there’s optimism and some excitement about the prospect of economic growth, whilst on the other, anxiety abounds regarding the detail of the new government’s legislative changes,” says Michael Stull, Managing Director of ManpowerGroup UK.
“There’s definitely a desire to pick up the hiring pace, but uncertainty still hangs in the air and jobs growth isn’t yet materialising because for all the positive intent, there’s still plenty of wavering.”
Recent third-party jobs data explains this mixed sentiment. UK unemployment remains low at 4.2%, but as the Recruitment and Employment Confederation (REC) recently reported, permanent staff placements were again down and redundancy volumes have increased over the summer, extending the UK’s current hiring downturn to nearly two years. Total job ad volumes for July, meanwhile, were slightly higher than in June (but 2% lower compared to July 2023), and vacancy levels overall remain high at 884,000.
More than a third of businesses surveyed by ManpowerGroup (36%) have consistently said this year they are planning to hire for growth. A similar number (35%) also say they will be hiring in Q4 because of backfilling vacancies (where positions are opened due to employee departures), while 27% plan to hire for specific projects or temporary initiatives requiring dedicated staff.
Sectors driving Q4 hiring demand include Information Technology, which has the strongest hiring outlook of any sector at +48%, followed by Healthcare and Life Sciences (+29%), Consumer Goods and Services (+28%) and Energy & Utilities (+27%), with Consumer Goods and Services (+28%) and Transport and Logistics (+24%) both showing the biggest quarterly shifts, given their sectoral hiring outlooks were flat (0%) and +9% respectively in Q3.
Stull adds: “The next quarter is going to be a transitional period for many businesses as they further adapt to the new political environment and we get to see more detail regarding Labour’s workplace legislation over coming weeks now that parliament is back from summer recess.
“Concerns also remain about wage pressures, interest rates, economic inactivity rates, persistent skills shortages, and skills mismatches. Employers would do well to familiarise themselves with and prepare for the legislative reforms that are coming sooner rather than later. Change waits for no-one, and those who are prepared and can adapt now will stand the best chance of reaping the benefits of future prosperity and productivity as the UK economy further recovers over coming months.”
To assist with labour reform preparations, ManpowerGroup UK has published a checklist for UK employers to inform their workforce planning over the next few months: Keep calm and carry on: Responding to Labour’s new workplace reforms – ManpowerGroup.
