14 June 2023

Employer hiring confidence has grown in almost every sector across the UK, rising by 8% since last quarter to 29%, according to the latest ManpowerGroup Employment Outlook Survey for Q3.

The ManpowerGroup Employment Outlook Survey polled 2,013 UK employers and asked if they intend to hire additional workers, maintain the current headcount, or reduce the size of their workforce in the upcoming quarter (July to September 2023).

The optimistic UK Net Employment Outlook follows a global trend and indicates the country’s businesses are remaining competitive in challenging economic circumstances. ManpowerGroup published the global report yesterday which found that the global Net Employment Outlook (NEO) is 4% lower than this time last year, suggesting that economic headwinds are starting to impact employers’ hiring expectations.

Meanwhile, the Outlook in the UK is 5% lower than this time last year, when overall job vacancies were at record high levels. Despite the 8% uplift since last quarter, many employers are still having great difficulties in sourcing the right talent amidst rising costs. 

“The intention to hire remains very positive for most businesses,” said Chris Gray, Director, ManpowerGroup UK. “Especially if you consider how this year began with concerns of a recession, and where we are in terms of inflation and the cost-of-living. We should lean toward the opportunities this positive Outlook indicates, as we’re still seeing concentrated demand in our real-time data for very specific skills across all sectors.”

Gray continued, “The intent to hire is promising in many areas but it comes partly due to the high number of reoccurring unfilled vacancies proving hard to fill due to niche skills scarcity. It also contrasts with the realities that high-volume employers are experiencing where speed to hire is more of a challenge. Ongoing talent supply issues are restricting UK business’ ambitions to grow, aligning what British employers need with the shortage occupation list will bolster our global competitive standing.”

ManpowerGroup’s research also found that industries in the spotlight lately because of mass layoffs are unexpectedly seeing some of the biggest increases in terms of hiring Outlook. They include Financials and Real Estate which had a 14% boost in the quarter with the Outlook now at 40%.

Like many other sectors, Financials and Real Estate is undergoing major transformations as legacy skills meet high-growth, new disciplines such as fintech, and cryptocurrencies. Its younger subsectors, underpinned by tech, are driving new hiring opportunities as traditionally high-volume employment fields, such as bricks and mortar services, see a slowdown, the Outlook noted.

The sector with the strongest hiring intent this month, despite recent reports of mass layoffs from businesses including BT and Vodafone, is Communication Services. Their Net Employment Outlook is 52%, an increase of 16 percentage points from last quarter and 34% compared to Q3 2022. It is followed by IT (+43%) which, although still an exceptionally strong Outlook, has seen a 5% decline in the quarter, and 9% over the year.

ManpowerGroup’s real-time vacancy data follows the Net Employment Outlook trend, whereby vacancies are down on the year but up month on month throughout 2023. The data also found applications per vacancy have risen 2% in April with an average of 13 applications per vacancy. Vacancies throughout the UK remain high but are steadily declining each month.

Gray continued, “Since the pandemic we’ve seen small businesses continue to suffer from pandemic paranoia and are more cautious in their hiring intentions as a result. Larger, especially international, organisations also have the added benefit that they can take a more long-term approach to hiring and potentially take into account how other markets are faring – acting as a barometer of what might be to come. We would hope to see small business confidence improve over the course of the rest of the year as they feel the positive trickle down of more positivity in the economy.”