What’s happening in the job market, why is it difficult to hire?

It appears that employers’ confidence in the UK economy has taken a turn for the worse during the first quarter of 2022 as inflation reached its highest for 30 years, according to the Recruitment and Employment Federation (REC). Despite this, employers remain more positive than negative about their ability to hire. The REC’s nationwide survey found that UK business confidence in hiring remained very high. In particular, employers’ intentions to hire permanent workers has spiked, diverging from the economic outlook, perhaps reflecting challenges in filling vacancies. Despite the economic backdrop, resilient British firms continue to invest in staff and growth remains on the agenda when employers think about their own business.

REC expects to see employers’ hiring plans decouple further from their economic outlook over the coming months as they face a tight labour market. Firms will need to find new, creative ways to attract candidates, as well as keep hold of the talented staff they have.

The Office for National Statistics (ONS) also published their latest labour market figures in April and in summary the market is tighter than it has ever been – unemployment is very low, but employment levels are still significantly lower than before the pandemic.

So where has the workforce gone?! It appears that following the pandemic many foreign nationals may have returned to their home nations and have yet to come back. Students may have opted to stay in education longer. Experienced employees took the opportunity to retire early. In fact, it’s believed rising numbers of people aren’t working but also aren’t looking for a job. Finding ways to tempt some of them back into employment will be crutial in the coming months.