Signs of post-covid economic recovery, part two…
Last week, we learned that UK mergers and acquisitions had jumped from a low of just 58 in May 2020 to 153 in March of this year – the highest monthly total since those sunlit, pre-pandemic uplands.
Now, following hard on the heels of that encouraging news, comes another window onto the (apparently vigorous) pace of economic recovery.
Research by recruitment company ManpowerGroup revealed that, as UK employers look ahead to the third quarter of 2021, they are feeling the ‘biggest bounce’ in hiring confidence in 20 years.
The company’s latest Employment Outlook Survey revealed that employment intentions for Q3 2021 had risen 13 points since the previous survey, taken at the start of Q2.
The factors behind this jump are not hard to find, of course. The recent easing of lockdown restrictions has meant that the retail and hospitality sectors have suddenly found themselves busy again – and in urgent need of staff.
Another rose-tinted headline from the survey was that UK growth was the strongest in any European country apart from Ireland. The retail, hospitality, finance and business services sectors all showed double-digit increases in their hiring intentions.
But what exactly is the Employment Outlook Survey, and what do those ’13 points’ actually mean?
Every quarter, ManpowerGroup quizzes employers across various sectors about whether they’re planning to increase or decrease their workforce over the next three months. So, a figure of, say, +10% will mean that those employers planning to hire outnumber those planning to make redundancies by, you guessed it, 10%.
The figure for the coming Q3 of 2021 is +8% – the highest for six years and, eye-catchingly, a 13-point rise from the outlook for Q2, before the lifting of those restrictions.
If we zoom in to look at the employment outlook for specific sectors, we can see that the finance and business services sector saw its hiring intentions rise by 13 points to +8%, continuing to recover strongly from its mid-2020 low of -17%. Hiring intentions in manufacturing, meanwhile, jumped from -4% at the start of Q2 2021, to +5% for Q3.
We shouldn’t be surprised to learn that two of the biggest winners were the retail and hospitality sectors. Taken together, the two sectors witnessed a 15-point jump in hiring confidence, from -7% last quarter to 8% for the coming Q3. Hotels and restaurants in particular are experiencing a huge upswing – hiring intentions here have gone from a bleak -18% to a distinctly healthy +26%.
“After the weakest twelve months for the UK’s jobs outlook in 30 years, employers are raring to get back to normal and capture the wave of pent-up consumer demand,” Chris Gray, director for ManpowerGroup UK, said. “Much of this is likely to be companies making up for hiring freezes and redundancies undertaken over the past 12 months.”
We can see similar optimism if we look at the results from a SME perspective. The survey revealed that small employers’ hiring confidence had gone up by 15%, while medium-sized employers had gone up an average of 19% in their hiring intentions.
As Chris Gray reflects, as well as being hugely positive news for the economy, this increased confidence will have another effect: a battle for the top talent. “Sectors like hospitality have never experienced anything like this sudden snapback in hiring,” he continues.
“The war for talent is hotting up. Employers are desperate to hire experienced chefs, waiting staff, retail workers and more, not least due to post-Brexit skills shortages in many of these roles.”
The flipside of the hiring-confidence coin is, of course, a talent shortage – and ManpowerGroup’s survey found that a massive 77% of employers are struggling to fill certain roles this year, more than double the 35% of employers who ticked that particular box back in 2019.
This is good news for employees, as the rush for talent is driving up wages. “In the logistics sector, we’re seeing wages for drivers increase by as much as 20%,” Chris Gray notes. “The shortage is being felt for several reasons – many drivers have not returned as a result of Brexit and fears surrounding the next milestone in the UK’s exit from the EU on June 30. Furthermore, driver training was stalled for many months as a result of the pandemic.”
The result, says Gray, is that logistics companies currently have “tens of thousands” of driver vacancies, with staff shortages seeing a 30% increase and employers seeking a balance between attractive pay offers and keeping prices down for consumers.
Are you feeling confident about hiring again, as the UK emerges from lockdown? The next 12 months could bring new faces to your company, and perhaps new working practices with them.
At Jefferson Talent Group, our business transformation consultancy can help you plan any changes to your personnel and working methods with confidence. Contact us today and let us help you to grow and prosper.