Global uncertainty undermining recruitment confidence

Jul 30 2004 by Brian Amble Print This Article

A question mark has been raised over the strength of the recovery in Britainís recruitment market with the release of figures suggesting that the number of employers predicting a rise in recruitment activity has fallen from 55 per cent in the last quarter to 51 per cent now.

The Recruitment Confidence Index (RCI), a quarterly trends survey published by Cranfield School of Management and the Daily Telegraph, suggests recruitment activity will remain stable but it won't be booming over the next six months.

Job seekers should be wary of reports that the recruitment market is bouncing back, the survey suggests, with the number of employers predicting no change in the number of hires over the next six months up from 31 per cent to 35 per cent.

When it comes to recruiting managers and professional staff, the number of employers predicting a rise in activity is down from 39 per cent three months ago to 32 per cent this quarter. But the vast majority - 61 per cent - say the number of managers and professionals they hire will stay the same.

In contrast, figures earlier this month from recruitment group Reed suggested that almost nine out of ten firms surveyed planned to recruit in the third quarter of the year, with four out of ten increasing overall staff numbers. Separate figures from the Chartered Institute of Personnel and Development (CIPD) painted a similar picture.

But another recent Reed poll suggested that confidence is nearly 10 percentage points higher among SMEs than in larger organisations, a factor that many be reflected in the RCI figures.

Nevertheless, the RCI argues that levels of business confidence over the past year further emphasise the concern many employers still feel about the current business climate. This quarter there are slightly more pessimists than optimists, but the majority of employers (62 per cent) are reserving their judgement and have remained neutral about business confidence.

Professor Shaun Tyson from Cranfield School of Management said: "We have been saying for some time that, although the UK economy has been performing well, there are potential problems ahead at home and abroad, which help explain why business confidence remains so flat.

"At home, the housing market has been fuelling UK demand but the price increases that we have seen are probably unsustainable. There are also fears that government spending plans will force up taxes.

"Looking abroad, there is the uncertainty surrounding the Middle East and threats of global terrorism but there is also the possibility that after the Presidential election in the USA, and the General Election in the UK, taxes will rise in both countries."