26 Mar, 2012

UK hiring activity flatlines

26 Mar, 2012

Hiring among UK medium and large-sized organisations contracted in the final three months of 2011 as employers battled to overcome candidate skills shortage, rising costs and economic uncertainty, according to the latest ‘Tracking UK Recruitment’ quarterly report by professional staffing recruitment consultancy Barclay Meade.

The UK jobs market had been showing signs of returning to a pre-recessionary state, after five consecutive quarters in which hiring levels edged closer to those seen before the financial crisis.

However, progress was halted in Q4, as the number of employers reporting that they were recruiting at similar levels to before the recession fell from 56% in Q3 to 53%.

In fact, 18% of business owners said hiring had reached a lower level than before the economic crisis, up from 12% in the third quarter of 2011. Further indication that the UK jobs market is stagnating amid ongoing economic turmoil.

However, a candidate skill shortage is contributing to the slowdown, as 35% of employers declare it’s their greatest barrier to recruitment, more than at any other point in 2011.

One in five (20%) felt the threat of a double dip recession was their biggest challenge to recruitment activity over the next 12 months, evidence that economic uncertainty is having a direct effect on employers ability to make firm hiring decisions.

Interestingly, the fastest growing problem is the expense of hiring new staff as it now hinders 20% of businesses compared with just 9% in Q3.

But the report by Barclay Meade – part of the AIM-listed recruitment business Matchtech Group PLC – does provide some hope, with 25% of business owners declaring they are still very optimistic about the future. This figure is up 5% on the previous quarter and it is now the fourth consecutive quarter in which the outlook of medium and large organisations has improved.

Barclay Meade’s ‘Tracking UK Recruitment’ Q4 report also revealed:

  • The number of firms operating a recruiting freeze stayed at the same level quarter-on-quarter at 16%, putting a stop to the gradual rise seen in the previous three quarters
  • Graduate/entry level recruitment among medium and large organisations fell for the third consecutive quarter, down from 39% in Q2 2011 to the current level of 27%

Nigel Lynn, managing director of Barclay Meade, says: “Throughout 2011 our tracker findings showed a lack of confidence in the wider economic situation acted as a great hindrance to hiring for many businesses. The results from the final Tracking UK Recruitment report of the year paint a similar picture and, as instability in the economy continues to slow down the recruitment process, employers are understandably cautious when it comes to investing in new staff.

“Aside from economic worries, a candidate skill shortage has increased as a problem and is currently a barrier to recruitment for more than a third of firms, suggesting many talented potential recruits could be sitting tight and waiting to see how the economy develops before making a decision on changing jobs.

“Despite businesses ending the year on a cautious note, our report highlights the fact many employers remain optimistic about the year ahead. What’s clear is that the sooner the crisis within the eurozone is resolved and clarity in the economy returns, the sooner employer confidence will return and benefit the UK jobs market. Until then the cost of making a wrong hire is as high as ever, so the recruitment industry must continue to support UK businesses by understanding the precise needs of companies and ensuring it delivers the right candidates to interview.”

Credit: onrec.com