REC JobsOutlook: Employers still cautious but there are positive signs for jobs in 2011

Released on 18 January 2011

Employers intend to grow their permanent workforce in 2011 but are starting the year on a cautious note, according to the REC's latest JobsOutlook. However, there are some encouraging signs, particularly with regards to the increasing demand for temporary staff.

Ahead of tomorrow’s latest unemployment figures, the REC’s monthly survey shows that longer term plans for hiring permanent staff are positive with 21 per cent saying they would be adding to their headcounts during the year. A further74 per cent plan to keep their workforce numbers static and only five per cent forecast a decrease their numbers. In a positive start to the year, 95 per cent expect to either grow or keep their permanent staff to the same levels in the next three months.

In addition, 32 per cent of employers plan to grow their agency workforce over the next 12 months while just under one in five intend to increase their temporary staff within the next three months, double the proportion seen at this time last year.

Commenting on the latest figures, Roger Tweedy, the REC’s Director of Research, said:

“It is encouraging to see that employers are setting great store in building flexibility into their workforces for the short and long term while the economy remains in such a fragile state. Over the coming year, temporary work will continue to provide an important route back into the labour market.

“Though the labour market does show signs of stabilising, the first three months of this year could see a few jitters which is why the majority of employers are planning to keep their permanent workforce static. The public sector squeeze, together with the increase in VAT and slowing economic growth means that this caution is understandable – in fact we may have expected businesses to be more cautious about hiring in the short term."

He added:

“However, the feedback from recruitment professionals confirms that fluidity is returning to the jobs market. The fact that 20 per cent of employers are planning to increase staffing levels over the coming year is an encouraging sign but real concerns remain with regards to the ability of the private sector to absorb expected cuts in the public sector.”

With the public sector cuts now imminent, both 37 per cent of those working in the sector and private sector employers said they were expecting little impact. Only one per cent of private employers and nine per cent of public sector employers are anticipating the cuts will have a very serious impact on them.

JobsOutlook is based on a monthly survey of employers with results based on a sample of 600 on a three month rolling basis. To subscribe to JobsOutlook, contact Tracey McManus, tracey.mcmanus@rec.uk.com.