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June jobs outlook

The REC conducted research into companies’ opinions on how their permanent staff headcounts will change both in the short term (up to 3 months) and in the longer term (4-12 months) for the June Jobs Outlook market overview, along with research in to companies’ confidence in the current economy as the Brexit vote approached.

In the short term, almost seven in ten (68%) employers were planning to hold their existing levels of permanent headcount, and a further 20% were planning to increase numbers. This is an encouraging sign considering the introduction of the National Living Wage (NLW) in April and the continuing uncertainty associated with the EU referendum. Just 4% of employers planned to decrease numbers over the next quarter and for 3 in 4 of these this will be a small reduction.

In the longer term, post-referendum, more than eight in ten (85%) employers surveyed over the quarter anticipated that they will be either adding permanent headcount again (20%) or will be able to hold existing levels (65%). Of note, however, is the 12% of employers who do not know what the medium-term prospect is for permanent hiring.

More than 7 in 10 (72%) employers felt that domestic economic conditions were either getting better (48%) or remaining the same (24%) in the 3 months to May 2016, leaving just 22% believing that conditions had worsened. As a result, for over three quarters of employers (77%) there was no change or an improvement in their confidence in making hiring and investment decisions.

Overall this looks like a positive outlook for times ahead with the majority of companies feeling that economic conditions in May were either getting better or staying the same. This confidence in turn may be the reason that the majority of companies predict the same amount or a growth in permanent staff in the short and long term.

Clearly the picture has become more complicated since the vote on June 23rd to leave the EU, with many commentators predicting a decline in the UK economy, which would effect hiring intentions. The UK economy however is robust, and we remain confident that providing a quick and decisive settlement with the EU is reached business sentiment will remain positive over the medium to longer term.