Job hiring up amid concerns about skills gaps

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Employers have recorded their most optimistic jobs forecast in over a year, with employers saying they will take on more staff, but there are signs that this could be masking greater uncertainty and big concerns about skills gaps in certain sectors, according to a ManpowerGroup survey.

The ManpowerGroup Employment Outlook Survey is based on responses from 2,102 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter.  The news about job hiring intentions is positive, says the Group, but it could mask “a desperation” to fill vacancies amongst employers in sectors like hospitality which is heavily dependent on staff from the EU.

James Hick, Managing Director for ManpowerGroup Enterprise: “Against a backdrop of turmoil in the global markets and continuing national uncertainty, the rise in the national Outlook, to its strongest level in over a year, has confounded expectations. However, this surprise jump in confidence could actually be a mirage.

“Take the best-performing sector, Hospitality, which is up seven points to +16%, a huge fourteen-point rise since this time last year. On the surface, this might look like a sector that is firing on all cylinders, but this is at odds with the almost daily diet of news about struggles in the sector, such as Jamie’s Italian, which is closing a third of its sites and Byron Burger, which is closing up to 20 branches as part of a rescue plan. Our view on the data is that it shows how desperate employers are to fill vacancies in an industry that is heavily dependent on immigration, with up to 24%1 of all staff coming from the EU. Given that the sector employs around 3 million people, losing that proportion of the workforce would leave a shortfall of three-quarters of a million people. In recent weeks we’ve seen more reports that
the number of EU workers arriving in the UK is falling – particularly those from eastern Europe – and employers are racing to make up the shortfall.”

The survey also points to uncertainty over the impact of expected interest rate rises and says early signs in Manufacturing and Construction, which are both down on hiring confidence.

Hick said: “The Construction sector has experienced a huge drop in hiring confidence this quarter, with a six-point fall to just +1%, down 12 points on this time last year. This chimes with recent PMI data showing a slowdown in all activity, even housebuilding, which saw its worst performance since July 2016. Despite political commitments around housing, the data raises questions around the future of policies such as Help to Buy. This uncertainty is causing developers to sit on their hands – a stance which may have been exacerbated by the recent house price falls in London.”

There is more hiring confidence in the East and the Midlands than in areas such as London, Yorkshire and the Humber which have all seen falls on last quarter’s figures.


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