Employer demand for temps has risen amid concerns about the economy, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook.

Firms have been feeling progressively more positive about their own prospects for the past 12 months, despite the strong concerns they have about the performance of the wider economy. However, the trend has reversed this month, with a minor decrease in confidence in investing in their own business. This is likely driven by the shallow recession the UK entered last autumn. Forward trends data – including from this survey – suggest that this month may be a blip, with confidence strengthening again as inflation falls, suggests REC.

In response to this higher uncertainty, hiring intentions for agency workers in the short term increased to +10, from +3. Greater use of temporary work is a typical employer response to this kind of situation.

“The Bank of England has been squashing growth to get inflation down for the last year – but now we really need to go for growth to boost incomes and fund public services,” says Neil Carberry, chief executive of the REC. “We are convinced there is underlying growth potential, as seen by the stronger February sentiment on permanent hiring intentions by comparison to the previous two months.”

The survey covers the period just before the Spring Budget 2024. The level of employer concern about the wider economy emphasises again that a clear industrial and workforce strategy is needed. While the Budget contained a number of good initiatives, it fell short of this vital test. No attempt to drive growth will succeed without a proper appreciation of workforce issues.

Neil Carberry said: “Recruiters are the WD-40 of the labour market. They help companies grow and workers find opportunities – including 25.7m temporary and contract placements in 2022. Their expertise can also help government be more effective. From the Apprenticeship Levy to infrastructure and effective regulation there is a lot more to do that will help tackle inactivity, boost investment and raise wages. But only a true partnership approach, based on a clear industrial strategy, can deliver this.”

Stay up to date

Keep me up to date to receive all the latest news and updates.