This week’s employment figures published by the Office for National Statistics (ONS) showed that the unemployment rate held reasonably steady at a near 11-year low of 4.9% in the three months to August with a small rise of 10,000 to 1.66 million.
That will be broadly welcomed, especially by those politicians who have been arguing that the vote to leave the EU has so far had little impact on the economy.
But the question is for how long and what are the longer term implications for the jobs market given the question marks over what will happen to those from other countries currently working in the UK and the ongoing skills shortages which many employers are still highlighting as a significant issue.
The Recruitment and Employment Confederation (REC), of which many Recruitment Agencies are members, takes a monthly in-depth look at the state of both the recruitment industry and the sentiments of employers.
In its latest Markit/REC monthly survey on jobs published on October 7 the key findings were a moderate increase in permanent placements and vacancies and a slightly slower decline in candidate availability.
However, the results of another monthly REC survey published in late September, this time among employers, found that a third of those surveyed stating that they had no spare capacity to take on more work without hiring more staff while 25% expected to take on more staff in the medium term.
Confidence is also a factor and most likely the reason for a lack of investment in both productivity and growth since 2007. Related to this is the uncertainty about Brexit. While a decline in the value of sterling may justify investment in UK plc by foreign companies, if it remains at the current low levels, the lack of investment will result in low value jobs.
Confidence, too, has weakened each month since the referendum with a third of those surveyed reporting that economic conditions were worsening.
This prompted REC Chief Executive Kevin Green to say: “there are question marks around the sustainability of positive trends we have seen since the referendum. 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 sectors where it is most difficult to find suitable candidates are in engineering, tech, construction, health and social care.
The implications for the recruitment industry
Uncertainty is likely to affect the recruitment industry, as for any other business, for the foreseeable future.
But, depending as it does, on being able to source and supply suitably qualified and skilled candidates the recruitment industry is going to be affected not only by confidence among employers but also by its ability to find the right candidates.
In addition, there is a question mark not only on post-EU immigration policy as it will affect the ability to recruit the best people, but also on the potential for a raft of additional legislation about checking on candidates’ eligibility to work. That may add to the industry’s responsibilities and make its job even more difficult.
There may also be a distortion in the employment stats with the number of self-employed workers increasing by 273,000 to 4.79 million – 15% of all people in work.