12 Dec, 2012

2013 UK Hiring

12 Dec, 2012

The UK’s Employment Outlook now stands at its strongest level since before the recession, according to ManpowerGroup, the world leader in innovative workforce solutions. With an Outlook of +6%, employers across the UK are looking to take on staff in the first three months of 2013, giving the jobs market a new year boost.

  • National Outlook of +6% for the first quarter of 2013 – doubles from Q4 2012
  • UK returns to pre-recession hiring levels
  • Private sector on track to plug gap left by public sector job cuts

The Manpower Employment Outlook Survey is based on responses from 2,100 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming economic quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic statistic by both the Bank of England and the UK government. The national Seasonally Adjusted Net Employment Outlook of +6%1 indicates that the jobs market looks twice as good as it was in the final quarter of 2012 when the Outlook was +3%.

1 Unless otherwise stated, all figures reported are based on seasonally adjusted data.

2012 turned out to be an extraordinary year for the jobs market and it seems that the trend is set to continue strongly into 2013. This time last year we were on the edge of a bleak midwinter, but despite the double dip recession, 2012 ended up as a period where employers decided to head back tentatively into the jobs market. As we head into the New Year, the remarkable resilience of the UK labour market looks set to continue.” said ManpowerGroup UK Managing Director, Mark Cahill.

Cahill adds: “Companies that are doing well are looking to take on staff. A good example of this is in London’s Tech City hub. In 2008 there were a handful of companies operating there. Now well over 3000 firms have sprung up employing 50,000 people, and still looking to recruit large numbers of staff. However, we should not be under the illusion that we have returned to the boom years of hiring. ManpowerGroup’s data shows that the good news this time round is being driven by a relatively small number of businesses looking to expand. We should not get carried away, today’s jobs market lacks the dynamism we saw before 2008, with the vast majority of UK firms continuing to sit on their hands.”

“The surge in optimism this quarter should also be seen in the context of a changing employment landscape. Undoubtedly these are good figures and should bring some much needed Christmas cheer to the economy, but underlying this is a more complex picture. There has been a seismic shift in the nature of employment with many of the new roles created being temporary or part time positions. Whilst workers can expect a lower risk of losing their job, the flipside of this is that there is now a higher risk of having to work reduced hours or seeing a wage cut in real terms. The message to jobseekers is clear: If you want to get ahead in the 2013 jobs market, you need to accept this as the new reality of the jobs market.”

Cahill continues “We also see this “new reality” in the public sector. It’s been well publicised that local councils across the UK have and continue to shed staff because of the austerity cuts, but this has created an opportunity for the private sector, albeit through part time/flexible contracts which are more cost-effective. This trend is supported by the ManpowerGroup data which shows that while private sector hiring intentions stand at +5%, public sector hiring intentions have fallen to -3%2. The silver lining to this cloud is that it now seems that the private sector is on track to plug the gap left by the public sector jobs cuts and in the first 6 months of this year we have seen public sector employment drop by 78,000 whereas private sector employment has increased by 497,0003.”

2 Figures for public and private sectors are not seasonally adjusted. Seasonal adjustments are applied once there is 17 consecutive quarters of data available.

3 Office for National Statistics, Labour Force Survey.

UK employers of all sizes are looking to hire. Large (+11%), small (+12%), and medium-sized (+10%) businesses have all put in strong double digit performances and although the overall picture is held back by the performance of micro-sized business (those employing between 1-9 members of staff), this sector still stands at a four year high (+3%).

Looking at the jobs market from a regional perspective, there is a consistently positive message for the whole of England, with no evidence of the North South divide which has been feature of the jobs market in recent years. The North West has seen an uptick, rising to a healthy +6%, with the North East is also positive (+4%). Both the East and West Midlands report healthy scores of +8%. London and the South East remain upbeat +5% and +7% respectively whilst the clear regional winner is the East of England recording a score of +11%. Scotland is the only part of the UK which records a negative score (-1%) with Northern Ireland flat lining at 0%.

Whilst the outlook is as positive as it has been in 4 years, black spots still remain. The outlook for Construction is particularly weak (-14%). This is all the more troubling when you consider that were it not for the new infrastructure investment, the situation could be even worse.

Of the sectors that are doing notably well, employers in the Retail, Wholesale, Restaurants and Hotels sector records report the best Outlook (+3%) since mid-2008. This could indicate that, after a torrid time on the high street with big chains like Comet collapsing, early signs of

consumer confidence are beginning to return. A good example of this is Sainsbury’s which announced recently it would take on 10,000 staff over the next three years to staff its convenience stores business. The main winner is the Finance and Business services (+13%), but the optimism here this quarter is among business services firms rather than financial ones.