The number of organisations in the UK looking to increase the size of their workforce has grown for the fourth consecutive quarter, with half of employers planning to take on new staff over the next six months.
The latest Cranfield School of Management's / Daily Telegraph Recruitment Confidence Index (RCI), suggests that 52 per cent of employers are looking to expand their workforce.
But while almost a quarter 23 per cent say the number of unfilled vacancies will go up over the next six months, employers appear to be worryingly relaxed about how they will fill these vacancies.
They are not planning an increase in recruitment spend, nor are they predicting a severe skills shortage. Although almost four out of ten are planning to increase their spending on commercial recruitment web sites and one in three say they will increase their spending on employment agencies, recruitment spend is largely set to remain the same.
Professor Shaun Tyson from Cranfield School of Management said: "All the indicators this quarter point to increasing demand for labour. The question is will the supply of labour be readily available, especially in the 'hot spots' of the South East of England?
The index suggests that sales managers will be in greatest demand over the next six months with one in three employers looking to recruit selling skills.
IT staffing also looks set to emerge from the doldrums. For the first time in four years employers are predicting a rise in demand for IT skills. Eighteen per cent say they will recruit IT staff over the next six months, up from 15 per cent in the last quarter.
"The imminent expansion of the European Union does have the potential to fill some of these jobs, Professor Tyson added, but it is unlikely to have a dramatic impact immediately. Rising labour costs could see jobs going the other way and moving out of the UK to elsewhere in Europe."
Stephanie Richards, recruitment research manager at The Daily Telegraph said: "The challenge facing employers is whether they are prepared for the pending hike in vacancies. If they intend to rely on the existing supply of labour, as seems to be the case, they will need to think seriously about how they use reward packages to attract, retain and motivate staff."
But the buoyancy of the recruitment market appears to have had little impact on business confidence. Prior to the outbreak of the War in Iraq 65 per cent of respondents reported optimism regarding business confidence. That figure plummeted during the crisis and remains at only 19 per cent this quarter.