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Recrutiment & Employment Confederation

JobsOutlook: Employer confidence drops quickly – but labour shortages mean businesses still need to hire

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Employers’ confidence in both the UK economic outlook and their own ability to invest in their business dropped quickly in the second quarter of 2022, with inflation and labour shortages causing widespread concern. That’s according to new data from the Recruitment and Employment Confederation (REC).

In April-June 2022, employer confidence in making hiring and investment decisions for their own business hit net: -13. This is the same level as April-June 2020, at the height of the pandemic. Meanwhile, business confidence in the economy fell by 40 percentage points from January-March 2022 to net: -50.

Despite this, labour shortages mean that many firms are still trying to hire new staff. The hiring outlook stayed positive, although it slowed slightly from the first quarter of this year. In the short term, hiring intentions for permanent staff decreased by 5 percentage points to net: +23, while demand for temporary workers fell by 4 points to net: +12.

Neil Carberry, Chief Executive of the REC, said:

“This new report clearly shows the effect of rising inflation and labour shortages on businesses across the country. The economy has slowed significantly from the post-lockdown bounce and the next few months look much tougher. While firms are still looking to bring on new staff, this is really a reflection of how difficult businesses have found it to hire so far this year. All of this only emphasises the importance of companies working with professional recruiters on their plans – and for government to take action so we aren’t choking off the growth we need.”

“Part of the solution will be more inclusive recruitment processes, so it’s encouraging to see a fifth of companies pushing in that direction. But it also means investing in training and developing staff, and ensuring working conditions and benefits are competitive enough to help attract and retain talented people.”

Other stats from the latest JobsOutlook include:

  • In the medium term (the next 4-12 months), hiring intentions for permanent staff and temporary agency workers both declined by 2 percentage points from the previous quarter, to net: +25 and net: +13, respectively.
  • In April and June, when asked about four recruitment policies1 designed to improve equality, diversity and inclusion (EDI), almost one in five employers (18%) had not implemented any of them as part of their hiring process. Encouragingly, 18% were planning on introducing at least one of these policies in the future.

Another recent report from the REC found that if labour shortages continue, a spike in demand in the economy could cost the UK up to £39 billion of lost growth every year, equivalent to almost the entire defence budget. This would also lower wage growth and reduce tax income, as well as causing lower profits. In Overcoming shortages: How to create a more sustainable labour market, the REC set out a number of recommendations for business and government, including prioritising long-term workforce planning at the highest level.


Notes to editors:

The four policies were:

  1. Diverse interview panels
  2. Name-blind CV submissions
  3. Using wording specifically designed to be inclusive in job adverts
  4. Specifically stating an interest in diverse candidates in job adverts.

​JobsOutlook is produced by the REC in partnership with Savanta ComRes. Savanta ComRes interviewed 602 UK employers involved in hiring by telephone between 4 April and 24 June 2022. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split. Savanta ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at

For more information and interview enquiries, contact the REC Press Office on 020 7009 2157, 020 7009 2129 or Outside of regular office hours, please call 07702 568 829.

The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

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