Having interviewed a representative sample of 2101 employers in the UK, the ManpowerGroup’s Employment Outlook Survey for the first quarter 2020 (Q1) shows that they are reporting their weakest hiring confidence in seven years.

Hiring intentions for Q1 of 2020 are down 3% to +2%, with declining confidence in nearly every sector and region painting a sluggish picture for the start of the new decade, with only a few bright spots alleviating the general gloom.

Chris Gray, director of ManpowerGroup UK, explained: “Signs of a slowing global economy, a General Election and a lack of clarity about Brexit are all weighing heavily on the minds of employers leading to many hiring plans being put on ice. Employers want certainty before they can make investment decisions and firm up hiring plans”.

He said that one of the most eye-catching figures this quarter is the abrupt fall of employer hiring confidence in London to -1%, a 5% quarterly decrease and the capital’s first negative Outlook since 2010.

Only the West Midlands (13%) and the manufacturing sector (+4%) buck the trend with more optimistic hiring sentiment.

The labour market continues to be very tight with employers continuing to report a shortage of skills such as engineers, IT staff, trades people, customer service representatives and medical professionals — irrespective of sector or location.

“We see little sign of skills shortages easing in the foreseeable future,” Mr Gray said. “Our advice is that employers must keep planning — thinking about their strategies for attraction, retention, training and succession planning to best prepare for the future.”

Full details of the survey can be found at https://www.manpowergroup.co.uk/wp-content/uploads/2019/12/meos_q120_brochure.pdf?utm_source=website&utm_medium=banner&utm_campaign=meos.

Comment by Danny Done, Managing Director at Portfolio Group

The start of the New Year is usually a time when many employers assess the capacity of their existing workforce and come up with a recruitment plan for the next 12 months. However, these figures on hiring confidence make for grim reading. They suggest that firms remain reluctant to take a risk on any new hires, especially given the current uncertainty around the UK economy.

While the well-documented “skills-shortage” is undoubtedly affecting hiring confidence in critical industries, a lack of clarity on Brexit is also likely to be a contributing factor.

Although the Conservative Government has promised a new points-based immigration system for after the UK leaves the EU, there has been little explanation of how this will work in practice, aside from the fact that places will be prioritised to high-skilled individuals with desirable qualifications.

With this in mind, hiring confidence may improve as employers become more comfortable with the rules around hiring foreign nationals in a post-Brexit Britain. Until then, it may still be reasonable to expect employers to place a greater emphasis on retaining existing staff, as opposed to recruiting new ones, in the immediate future.

Last reviewed 13 December 2019