By Ben Simmons

Employer confidence held up last month despite continuing economic uncertainty, the Recruitment and Employment Confederation’s JobsOutlook shows.

The survey also revealed that the short-term outlook for agency staff is now stronger than a year ago, again demonstrating that the Agency Workers Regulations have not dampened employers’ plans for building flexibility into their workforces.

The JobsOutlook survey, which tracks future hiring intentions rather than actual placements, also reveals:

Two thirds of employers now planning to hire more permanent staff: A total of 65% of employers — up three points on last month - said they were intending to take on more permanent staff in the next three months, with another 30 per cent looking to keep them at the same level. Very few, only one in 20 employers, expected to reduce their workforce. In the longer term, the trend is up one point on last month with 60% of employers planning to grow their permanent staff number and another 38 per cent planning to maintain current levels over the next 12 months.

Demand for agency staff stays solid: Despite the full impact of the Agency Workers Regulations remaining uncertain, demand for agency staff stays solid and is up on this time last year. A total of 82% of employers are planning to either grow or maintain their temporary staff levels in the next three months. Over the next 12 months, the outlook is even more positive with 84% of businesses expecting to either expand or keep the same level of temporary workers.

Skills shortages in 2012: Employers again identified that the main skills shortages for both permanent and temporary workers will be in the computing, IT and telecoms sector, followed by technical and engineering, accounting and financial, and professional or managerial grade staff.

Shift in perception on public sector cuts: Private sector employers now believe the spending cuts will not have as much impact on their businesses as first thought. Only 28% now say the cuts will have either a quite serious or serious impact with the majority — 38% - anticipating little impact and another 32% saying they will not have any effect.

In comparison, the outlook is bleaker in the public sector with 32% of employers expecting a very serious impact and 39% saying the impact will be quite serious.

Commenting on the latest statistics, Roger Tweedy, the REC’s Director of Research said:

“Despite the ongoing undercurrent of uncertainty among employers, there are some positive signs with the majority of employers now planning to slightly increase their permanent workforce. In addition, the outlook for agency staff hires now looks stronger than a year ago despite new regulations coming into force.

“The slight upturn in employer confidence does not translate so clearly in the longer term where caution still appears to be the watchword. Employers will continue to seek tangible signs of economic growth before committing to significant long-term hiring plans.

“However, it is important to note that the overall picture is far more robust than at many periods over the last year. The employer confidence barometer remains steady at 24 which is up on the same period last year and compares to a low point of 19 in September 2011. Over recent months, the proportion of employers introducing cut backs of any kind — headcount, pay, hours — has been falling which is also a positive sign.”

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