Government needs to sustain jobs growth after Brexit vote, says REC

Government involvement is needed to sustain the growing jobs market success and also quell plummeting employer confidence since the EU referendum, an industry body said on Wednesday.

The JobsOutlook survey by the Recruitment and Employment Confederation (REC) and carried out by Comres, found that business confidence had deteriorated since the Brexit result in June, although employers have said they need to hire more staff to meet demand.

A third of the 650 employers surveyed in the three months to August, said they have no capacity to take on more work without hiring more people, while 43% said they have only ‘a little’ capacity and would need to grow their workforce to meet the rise in demand.

About 22% planned to take on more permanent staff in the next three months whereas only 4% expected to reduce their workforce.

REC chief executive, Kevin Green said there was a “resilient business-as-usual attitude” from consumers since the referendum as demand on businesses has remained buoyant and employers said they will expand their workforces, but there were question marks around the continued effect of the positive trends.

“Skills shortages are a major problem in many sectors, one that will only get worse if the supply of skilled EU workers is in any way curtailed. Employer confidence has fallen significantly, suggesting that while businesses continue to perform well, there is much anxiety about what the future holds.”

The survey showed that business confidence had fallen month-on-month since the referendum. In August, 34% of respondents said economic conditions were “getting worse”, in comparison to the 22% in July and 13% in June.

A quarter of businesses surveyed said they planned to take on more permanent staff in the next four to 12 months, but permanent and temporary vacancies in engineering and technology, construction, and health and social care were difficult to fill due to a shortage of suitable candidates.

Green added: “The government can help to allay these concerns. We hope that fiscal stimulus will be top of the agenda in the Chancellor’s autumn statement. That, coupled with an immigration policy designed to help businesses thrive, will improve confidence and bolster the success we have seen so far.”

The survey also found that 27% public sector employers made redundancies in the last year, compared to 16% in the private sector.