Employers are currently adopting an increasingly cautious ‘wait-and-see’ approach to hiring new staff, with the number of graduate vacancies in particular predicted to fall by 1.2%.
According to the Recruitment & Employment Confederation’s monthly JobsOutlook, January suffered a marked dip (2%) in the number of employers expecting to take on permanent staff in the short-term, bringing the total to 63%. A further 31% said that they planned to keep headcount the same.
Over the next 12 months, however, the situation was anticipated to worsen. Only 59% of employers anticipated hiring more people, while 39% intended to maintain existing staffing levels, an 8% decrease on the previous month.
Roger Tweedy, REC’s director of research, said that, last November, a lot of organisations had been hoping to increase their workforces slightly in the New Year.
“However, there has been a significant dip in employer optimism that is likely to be linked to continuing economic concerns over the sovereign debt crisis in the Eurozone,” he explained. “Most employers have retrenched to a much more cautious ‘wait-and-see’ approach, which is starting to be reflected in the REC’s Employer Confidence Barometer index.”
The index fell by one point when compared with December, but is still five points higher than it was at its lowest level last September. Also on the plus side, “a significant number of businesses still plan to take on new staff during the course of the year, despite the slight change in mood”, Tweedy added.
As for the temporary staff situation, short-term hiring intentions remained stable despite the introduction of the Agency Worker Regulations in October, which meant that personnel were entitled to equal treatment with permanent employees from December. Since the new rules came into force, a huge 65% of employers had made no change to the number of temp staff that they used, indicating that their impact was limited only to specific sectors.
While 57% said that temp headcount would remain constant over the next quarter, 27% expected to take on more. Long-term, just under two thirds believed that numbers would likewise remain the same, while 22% indicated that they were planning an increase.
Drop in graduate vacancies
Despite high levels of unemployment, however, a number of sectors predicted skills shortages over the year ahead. On the permanent staffing side, shortages were anticipated in professional and managerial roles; nursing, medical and healthcare areas as well as education and training.
On the temp side, they were considered likely in driving and distribution (21%); catering and accommodation (21%) and accounting and finance (16%).
As for the graduate employment situation, the Association of Graduate Recruiters forecast that the number of vacancies for this section of the population would drop by 1.2% compared with a 1.7% rise last year. The predictions were based on a poll of 214 graduate recruiters across 20 sectors.
Despite the almost 3% fall, Carol Gilleard, the AGR’s chief executive, painted the news as positive. “The findings show that the market is predicted to remain relatively stable, which is a relief and should be seen as good news against an uncertain national, European and global economy,” she said.
Because the job market is “intrinsically linked to business confidence”, she was “cautiously optimistic” about the outlook for graduate recruitment over the year ahead, Gilleard added.
The research also indicated, meanwhile, that the average graduate starting salary was likely to rise by 4% to £26,000 this year, after having remained static at £25,000 since 2009. The increase is the largest since 2005, when starting salaries jumped by 7%.
Moreover, although 96% of graduate recruiters said that they intended to use online channels such as social media and job boards to target students, a huge 89% still planned to visit universities and campuses.
About half professed themselves unaware of the two-year degree schemes that some further education bodies introduced this year, however, while those that had heard of them said that they were concerned about the lack of time students taking part in such course would have to gain workplace experience.
