HIRING CONFIDENCE STUMBLES IN WALES

MANPOWERGROUP EMPLOYMENT OUTLOOK SURVEY REVEALS FURTHER DROP IN HIRING CONFIDENCE AFTER A STRONG START TO THE YEAR

• Outlook of +3% for the region
• Shortage of experienced workers presents opportunities to train millennials  
• Competitive pay motivates many candidates to travel for work
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12 JUNE 2018: Against the backdrop of Brexit uncertainty, lower-than-expected economic growth and falling consumer confidence, employers in Wales are becoming more cautious about hiring, with an Outlook of +3%, according to ManpowerGroup, the world’s workforce experts.

The Manpower Employment Outlook Survey is based on responses from 2,107 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic statistic by both the Bank of England and the UK government.

Jason Greaves, Operations Director of Manpower UK said: “Hiring confidence has continued to drop this quarter, down another point from Q2 after a strong start to 2018. But employers are still planning to add headcount but at a lower rate.  The region faces a number of challenges such as a shortage of skills amplified by an ageing workforce, with more and more of the older, experienced workers leaving the workforce due to retirement.  Employers in the region have responded to this by creating opportunities to train millennial workers and looking into what motivates staff beyond just pay – for example a good work/life balance and competitive benefit packages.”

“The skills shortage also means that when a suitable candidate is found, they often have the luxury of more than one job offer and can afford to be choosy.  Experienced candidates with in demand skills are also now more likely to ‘job hop’ and are willing to travel that bit further for a more competitive salary.”

In comparison, the national Outlook of +4% equals the most downbeat hiring prospects since 2012. . The Outlook has been dragged down by a fall in hiring confidence in the finance and business services sector, which has plummeted to a nine-year low of -1%.

James Hick, Managing Director for ManpowerGroup Enterprise comments: “This is the first quarter since 2009 – when Britain was in the depths of the financial crisis – that we’ve seen business and financial services employers record a negative outlook. As the UK is a global centre for financial and professional services, if the sector’s shrinking, it’s not good news for UK plc. While financial services only employ 3.5% of workers, it generates about 11% of Government tax receipts. Technological innovations mean banks are now more automated, and we’ve already seen branch closures announced by the likes of RBS and Lloyds, which will cause significant job losses.”

Hick again: “The business services sector is also hugely important to the UK’s economy, accounting for £186 billion (11%) of the UK’s total goods and services produced and employing 4.6 million people – 13% of the UK’s total workforce – in a range of businesses comprising everything from outsourcing companies and estate agents to law firms and accountants. We have seen countless negative headlines about the sector recently, and these are undoubtedly hitting hiring intentions. The shockwaves from Carillion’s collapse are still being felt, and outsourcing company Capita recently carried out an emergency £700m rights issue to pay down its debts and provide some much-needed investment. Elsewhere, the big professional services firms are facing an even greater fight for international talent in the face of Brexit, while the lacklustre property market and increased online competition has hit estate agents such as Countrywide and Foxtons.”

In a gloomy quarter, manufacturing is a particular bright spot. Its Outlook has increased to +7%, and the sector has typically out-performed the national Outlook over the last year. Hick again: “The weak pound may be bad news for UK holiday makers, but it’s proving to be good news for British factories exporting overseas. Some British manufacturers have even been investing in expansion to cope with strong demand. Dairy Crest, the company behind the mature cheddar brands Cathedral City and Davidstow, recently announced plans to invest £85m in the expansion of its cheese factory in Cornwall, with a focus on expanding production to meet growing demand in markets as far afield as the US, China and the Far East.”

Despite the large contribution of business and financial services, London is holding up, in line with the national Outlook of +4%. Yorkshire and the Humber employer hiring confidence has swung from being the least upbeat region to being one of the most optimistic, now at +8%, a seven point increase. The biggest faller this quarter is the West Midlands, down ten points from +9% to -1%, the region’s first negative Outlook since 2012. Employer confidence in the East Midlands is also easing and is now +6%, from +10% last quarter. A picture of declining confidence across the middle of the country is completed by the East of England, with the Outlook at +1%, a nine point drop quarter on quarter, its lowest level in a year. Northern Ireland and Scotland have slipped into negative territory, both sit on -2%.