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The anticipated hiring activity across the UK represents the strongest national fourth quarter figures since 2004, according to recruitment firm Manpower, although confidence has eased slightly compared to this summer.

The figures released in Manpower’s Employment Outlook Survey, a quarterly study of UK hiring trends covering the period October-December 2007, reveal a very stable labour market which is broadly in line with the national average for the last eleven quarters.

Eighteen per cent of employers plan to take on more staff, five per cent intend to make headcount reductions and 75 per cent expect to make no changes to staffing levels, giving a Net Employment Outlook¹ of +13 per cent. When seasonal variations are removed from the data, the Outlook is +12 per cent.

Struggle to find right staff 

Mark Cahill, Managing Director of Manpower UK, says that the labour market remains robust and stable, with employers in eight of the nine industry sectors surveyed planning to take on more staff this quarter. Nearly one in five businesses will be recruiting more employees by the end of the year.

He warns that many employers continue to struggle to find the right staff, however, and so having the right retention and recruitment strategies in place has never been more important.

Manpower’s survey of 2,100 employers across the UK reveals that employers in the finance and business services sector are the most optimistic about their hiring plans, with 26 per cent looking to expand their workforce and just three per cent planning to reduce their payroll.

This gives an Outlook of +23 per cent representing a slight increase of two percentage points on last quarter and is the same level as last year.

Hiring confidence 

Confidence is being driven in particular by employers in the business services sub-sector where 26 per cent of employers expect to grow their workforce and only three per cent plan to make cut backs. Employers in the finance sub-sector are more restrained in their recruitment, reporting an Outlook of +10 per cent.

Hiring confidence is also robust among employers in the transport, communications and mining sectors. While recent reports indicate continued strong output growth within the manufacturing sector, this is not reflected in this report.

Employers anticipate an Outlook down by four percentage points over the quarter to +10 per cent and matching the Outlook for the last quarter of last year.

Agriculture, hotels, retail and utilities sector employers report results notably below the national average. Employers in the high street sub-sector will ease off their recruitment plans by five percentage points to +4 per cent over the last quarter but are slightly more positive (two percentage points) on last year.

Hotels and restaurant sub-sector employers intend to scale back their hiring plans significantly this quarter but will be slightly ahead of the same point last year with a net employment outlook of +7 per cent.

Low vacancy rates

“Consumer spending has decreased as increases in interest rates and concerns about inflation have employers thinking twice. We are now seeing this translating into more cautious hiring intentions on the high street,” Cahill explained.

"We are also seeing a rebalance of recruitment in the hotels and retail sector following predictions of strong hiring this summer, perhaps not surprising given the wet weather much of the country has recently faced,” he added.

Cahill says that the good news is that there is no shortage of staff within the industry sectors surveyed, with low vacancy rates largely thanks to employers benefiting from increased migrant labour.

Weakening consumer confidence does not seem to have affected hiring plans in other business sectors. What impact this may have over the coming months remains to be seen, according to Manpower.

Positive hiring climate 

Around the country, employers in 11 of the 12 regions surveyed predict a positive hiring climate for the October to December 2007 period. The exception are Scottish employers who anticipate their weakest Outlook since Quarter 4 2002, at -1 per cent.

Employers in the West Midlands and Yorkshire & Humberside are the most confident, recording both year-on-year and quarter-on-quarter increases, reporting Net Employment Outlooks of +27 per cent and +22 per cent respectively.

Conversely, employers in the North East, the North West and Northern Ireland all report Outlooks weaker both quarter-on-quarter and year-on-year.

Employers in London are notably more upbeat about their hiring plans following two periods of muted growth. The Outlook of +17 per cent is the strongest anticipated hiring level for the region this year.

Across the countries surveyed in the Europe, Middle East and Africa (EMEA) region, job prospects have weakened from three months ago but the majority have improved compared to the same period last year.

Employers' intentions 

Employers in Germany, Norway, Spain and Sweden are the most optimistic about taking on more workers. Employers in Sweden are reporting their most upbeat Outlook since the survey was established in this country, while the German Outlook is identical to last quarter’s positive forecast, which was the country’s most optimistic survey result to date.

The Manpower Employment Outlook Survey is conducted quarterly to measure employers’ intentions to increase or decrease the number of employees in their workforce during the next quarter.

The survey is based on interviews with nearly 52,000 public and private employers worldwide.

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Related links

• Manpower UK