Despite forecasts that the UK will enter a recession this year, employees and jobseekers remain surprisingly optimistic about their job security and career progression prospects, though the tough economic environment is impacting pay and macroeconomic confidence. That’s according to the Robert Half Jobs Confidence Index (JCI) released today.
Created in association with the Centre for Economics and Business Research (Cebr), the new, quarterly Index is the most authoritative report on the key socio-economic factors influencing confidence in the UK labour market.
The research reveals that, while the JCI fell in Q4 2022 to stand at 19.9 – down 7.5 points from Q3 2022 (27.4) – it is up 58.1 points from Q2 2009 during the global financial crisis. The fact that confidence has increased by such a significant amount compared to the last pre-pandemic recession suggests that UK employers are facing an unprecedented and arguably, more challenging, talent landscape in 2023.
The JCI also suggests that while government instability in the third and fourth quarter likely dented consumer and business macroeconomic confidence, employees and jobseekers remain optimistic about both their job security, job search and career progression prospects. This confidence likely stems from the current tight labour market, with many companies struggling to hire workers with the right skills.
According to the data, the job security confidence pillar of the index is substantially up by 159.4 points when compared to the final quarter of the great recession in Q4 2009 to stand at 105.0.
Despite genuine concerns around the cost-of-living crisis and the sharpest downturn in real wages since Q1 2009 the Index also suggests that some remuneration optimism remains, with pay confidence up over the last quarter – a rise of 28.4 points, although the pay confidence pillar of the index was in negative territory in Q4.
With confidence surrounding job search, progression and pay on an upward trajectory, something that is unusual in times of economic uncertainty, Robert Half has warned that businesses will face an uphill battle for talent – and those that cut back on staff now will struggle to replace them when needed.
As Matt Weston, Senior Managing Director UK & Ireland, at Robert Half said, “There’s no shying away from the fact that whilst the UK economy is facing challenges ahead, however our Job Confidence Index doesn’t paint the picture of labour confidence doom and gloom that one may expect as we head towards a recession.
“The fact that our data reveals that employees are confident about both their job security and job search and progression prospects suggests that we are going to experience an atypical downturn.
“However, with the complex macroeconomic environment impacting business confidence in recent months, we have already begun to see changes to talent strategies that we predict will continue. Employers have had to be more innovative than ever before when planning and managing human capital, and we expect companies to lean on more agile flexible staffing models, as well as developing permanent employees through upskilling and reskilling programmes.
“One thing is for sure, though, investment in existing workforces, and developing compelling attraction strategies will be crucial to ensure that employers have access to the skills they require in what will continue to be a tight labour market.”