Employers confident despite choppy economic waters

The UK employment market appears to be in good shape, despite fears that economic conditions will deteriorate in 2017.

In fact, January statistics from the Recruitment and Employment Confederation revealed 76 per cent of businesses believe the economic environment will be more challenging this year compared with 2016.

Short-term hiring has softened slightly, with the proportion of employers looking to increase permanent staff over the next three months dropping from 24 to 21 per cent.

However, despite these changes, businesses are expressing extreme self-confidence in their abilities to tackle the upcoming year with aplomb. Nearly three-quarters of respondents said they expect their business to perform better this year, even if economic conditions worsen.

“Employers know that choppy waters lie ahead but are confident they can tough it out,” said REC chief executive Kevin Green.

“The jobs market has performed better than expected since the referendum. Businesses have held their nerve and we need this resolve to continue as fresh challenges arise in 2017.”

How is the economy performing?

The UK’s growth was surprisingly healthy in the wake of the EU referendum vote, with the Office for National Statistics (ONS) noting that GDP expanded 0.6 per cent between October and December 2016.

This was the same rate of growth as the previous two quarters, suggesting the notion of Brexit didn’t strike as much fear into businesses and consumers as originally expected.

Meanwhile, the latest ONS data revealed the labour market is almost at a full employment rate of 74.5 per cent. Pay growth has also increased 2.8 per cent over the last 12 months, although real wages may still feel the pinch if inflation rises in the coming months.

But what does this mean for the employment market overall? Mr Green claimed that some companies are already finding it challenging to identify the right candidates for current vacancies.

“The UK is at near-full employment and the available talent pool is shrinking. Economic volatility could make individuals more hesitant about moving jobs this year, which would add to the problem,” he explained.

Overcoming skills shortages

A lack of talent means some businesses are expecting skills gaps in their departments over the next few months.

Our latest Market Reports for the corporate governance sector indicate hiring managers are keen to increase their headcount. For example, 66 per cent of risk management departments feel they are under-resourced for the demands placed upon them.

Fifty-six per cent of respondents said the same about their compliance teams, while 51 per cent of internal audit departments believe they are under-resourced.

Clearly, organisations need to address skills shortages across their operations to ensure they are well prepared for a potentially rocky economic road ahead.

Nevertheless, corporate governance professionals who have the right combination of skills, experience and business acumen are likely to find they are in high demand both now and in the future.

If you’re a business and would like to discuss your recruitment needs, or a candidate looking for the next opportunity, please contact us today.

Our 2017 Market Reports combine our review of the prevailing conditions in the corporate governance recruitment market together with the results of our latest employer survey.