Hiring increases in United Kingdom for the first time in a year

  • Jan 11, 2020 GMT
  • Team Kalkine
Hiring increases in United Kingdom for the first time in a year

The Recruitment and Employment Confederation, the trade body of recruitment firms in United Kingdom, today came out with its latest survey on recruitments in the United Kingdom for the month of December 2019. The survey revealed that recruiters in United Kingdom have, for the first time in a year, started to hire more permanent employees. The trade body maintains an index called the REC’s permanent staff placement index, which grew by 6.35 percent during the month from a close of 48.8 in November 2019 to 51.9 in December 2019. This rise in index is marked by other leading indicators like consumer confidence and consumer credit figures also showing improvements during the month.

The United Kingdom has been through a period of marked economic turmoil during the past couple of years. The British industries have been reeling under a climate of uncertain future due to complications brought about by the possibilities of a without-deal Brexit. The employment rates have also suffered because of this in the country over the years, leading to a general feeling of pessimism among the average British Citizens. The economic environment in the country has started to improve towards the end of 2019 when the Benn Act (European union withdrawal act no 2 of 2019) was passed and the date for the Brexit withdrawal was shifted to the end of January 2019. The General elections of December 2019 provided another impetus to the people to hope for a better future and this was visible in improving consumer confidence levels in the month of December 2019. Prime minister Boris Johnson, just before the announcement of general elections, had negotiated a deal with the officials of the European union regarding the United Kingdom’s orderly withdrawal from the economic bloc. The deal could, however, only have been official after the formal adoption by the British parliament. The victory in the general election of Prime Minister Johnson provided him with the adequate votes in the British parliament to push through the deal, which he had reached with the European Union officials. The many uncertainties in the minds of the British people were thus extinguished after the announcement of the results.

The improvement in the index is a sign that the British industry now sees brighter prospects for the year 2020. The uncertain environment of the past years had stopped the businesses in the country from making any incremental investments. With the improvement in the economic climate in the country, now the businesses see the scope for expanding their enterprises and improvement in the REC’s permanent staff placement index is a testament to that. The index data, which at the mark of 50 divides contraction from expansion, has for the first time crossed the coveted mark since February of 2019. Neil Carberry, the chief executive of REC while commenting on the data, stated that the change is on account of the new government’s clear and predictable path ahead which is giving the businesses in the country the much-needed confidence.

The conclusions drawn could however, be biased on two accounts. The survey which was conducted between 5th December 2019 and 17th December 2019 also included responses which were collected after the result of the 12 December 2019 elections were published. Other than that, there also could be tax change implications which could be prompting employers to employ more permanent staff. However, the general feeling among the British businesses is that of buoyancy and most have a positive outlook about their businesses for 2020.

Among the industries which would be contributing the most to this heightened demand of labour are the retail industry, high technology industries and the hospitality industry. The retail industry has over the years obtained labor, which came from other European countries, at cheaper rates. The Brexit deal ensures that many of this labour would have to return to their respective countries since it will be more expensive for the British businesses to hire them. In the case of high technology industries, the Brexit-era allowed highly skilled workmen from other countries in Europe to come to United Kingdom to work in its high-tech firms. Post Brexit, the unavailability of these workmen will create a temporary scarcity which will have to met with increased domestic hiring. The hospitality sector in the United Kingdom also has the similar set of industry dynamics as the retail industry. This industry also employs a lot of European migrant skilled and semi-skilled workers, whose shortfall post Brexit will have to be met with domestic recruitments. This increase in hiring could be the result of two factors. The first one is the increase in investment spending across key sectors which is leading to the expansion of businesses. Second and most importantly, the increased hiring could be on account of replacement of key foreign employees who would not be available in the post-Brexit period.

The year 2020 however, will be a year of transformations for the British Economy. The year will see new business alignments being made and old ones being broken. There will be demand for new skillsets in the British economy for which more and more people will have to be trained. The level of business activity in the British economy will certainly come down in the aftermath of Brexit, no matter what the status of the deal on the date of the event. The British economy will struggle for the first couple of years to gain back the lost business activity in the post-Brexit era.  The British labor force will have a much greater role to play in gaining back the lost business activity for the economy. In the year 2020 and beyond, there will a heightened demand for labor in the country at all levels of skillsets. This new demand will mostly be met with domestic hiring as less people will be available from outside at competitive wage rates. The conditions are certainly going to be good in 2020 for the British people in general and the British hiring industry.

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