Employer confidence high despite UK economic roller coaster
The UK economy is full of contradictions at the moment. Retail sales surged four per cent in May, despite a string of big brands announcing closures and financial struggles.
Rumours that interest rates would imminently rise due to soaring inflation also appear to be unfounded for the time being. The Consumer Price Index remained at 2.4 per cent last month, meaning the Bank of England’s Monetary Policy Committee is likely to keep interest rates steady for June – but don’t hold us to that!
We are also getting mixed signals in the recruitment industry. Employer confidence turned positive for the first time since August 2017 in May, according to the latest Recruitment and Employment Confederation (REC) data. The number of people in jobs is now the highest it’s ever been.
But the uncertainty regarding Brexit, combined with sketchy economic data and job cuts across several industries, appears to be dampening permanent hiring plans. What does this mean for the immediate future of UK staffing?
Recruitment market exhibits strength
The good news is that employers believe recent gains in confidence will continue. A net balance of +14 per cent of businesses are feeling more optimistic about their hiring and investment decisions, the REC figures showed.
Office for National Statistics data published last week found 146,000 more people were in work between February and April 2018, when compared with the preceding three-month period. Year on year, the labour force has increased by 440,000 people.
Candidates will also be pleased to know that real wages appear to be rising, as salaries began to outpace inflation earlier this year. In fact, the ONS claimed wages grew at their fastest rate in three years in the first quarter of 2018.
“The UK jobs market remains a success story, but we must act now to address looming challenges that will impact on both demand and supply of staff,” said REC director of policy Tom Hadley.
Understanding the key employment barriers
What does Mr Hadley mean by ‘challenges’? First, Britain’s ongoing skills shortages remain a key problem for businesses, with many struggling to source the right talent for key positions.
Within corporate governance, cyber security is perhaps the most-publicised example of talent gaps. There will be a global shortage of 1.8 million cyber security professionals by 2022, according to (ISC)2.
But cyber security is not the only area of corporate governance struggling to find the right applicants. Only 48 per cent of internal audit teams feel adequately resourced for the demands placed upon them, our research revealed. The figures are only marginally better for compliance (53 per cent) and risk management (52 per cent) departments.
As the employed population grows, skills shortages are only going to deepen and competition between organisations for the best talent will get fiercer.
Brexit woes continue to cast shadow
In addition to skills shortages, Brexit fears continue to create uncertainty within the recruitment market. Prime minister Theresa May is struggling to get the EU Withdrawal Bill through Parliament, with a key battle against Remainer MPs scheduled for Wednesday.
Everything is building to a crucial EU summit on October 18th, but employers could be left waiting until mid-December if talks break down between UK and EU members at the October meeting.
Despite the unpredictability of Brexit, business as usual is the order of the day at many organisations. Hiring must continue and 2018 is a year when many regulations have or will soon be introduced, meaning employers don’t have the luxury of resting on their laurels and waiting for Brexit details.
That’s why it’s vital to have knowledgeable recruiters on your side, who can help you effortlessly navigate any developments in your industry or corporate governance function as they occur. If you’d like to discuss your hiring needs, please contact me on 0207 936 2601 or at email@example.com.
Our 2018 Market Reports combine our review of the prevailing conditions in the corporate governance recruitment market with the results of our latest employer survey.
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