JobsOutlook: Employer survey shows new-look government must turn economic doubters into believers to jump-start the job market, says REC.

The new-look government can lift the labour market by giving employers greater confidence in the UK’s growth prospects, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook survey of UK employers.

Today’s data shows employers are yet to shake off their caution about the economic outlook in a year marked by political uncertainty at home and the unpredictable conflict in the Gulf. The data points to a widening gap between business confidence and recruitment intentions, suggesting there is scope for stronger jobs growth if the government can inspire more confidence in the economic outlook.

The JobsOutlook shows a dip in surveyed employers’ confidence in the economy as well as their confidence to hire and invest, over the last quarter – pointing to caution and uncertainty among many firms in the face of economic and political headwinds. Yet in an encouraging sign for jobseekers, these same employers’ intentions to hire permanent and temporary staff in their own organisations remain higher than in the first quarter of the year. This suggests employers still need staff despite feeling less optimistic about the wider economic environment.

Maxine Bligh, REC Chief Membership & Innovation Officer, said:

“Employers continue to tell us they want to hire, and recruitment intentions are gradually improving. We also see signs in the data that employers are considering converting their recent reliance on temporary workers into permanent hires. But many businesses remain cautious. The gains are clearly there for the taking if the new PM follows through on his early signals that he wants to reduce business burdens as well as the costs to hiring. The focus on tax relief is welcome but overall, it is small fry to firms when you consider the extent of costs already absorbed and coming down the line as a result of the Employment Rights Act.

“The government has loaded too much onto employers at once, making it harder for the job market to get off the ground. Ministers must rethink elements of their employment rights reforms, especially the unworkable guaranteed-hours proposals for agency workers. If the government wants to unlock stronger job creation, it must keep the labour market flexible and support businesses’ capacity to hire and grow.”

Employers’ perceptions of how the UK economy was performing dropped by four percentage points this quarter (April-June 2026), totalling net: -47%, when compared to last quarter (February-April 2026). The sentiment dropped to -56% in April but bounced back in May (-43%).

Similarly, confidence in hiring and investment also decreased by two percentage points to net: -14% this quarter (April-June 2026) when compared to the previous quarter (February-April 2026). The decline in sentiment occurred primarily in April at net: -24% but improved to net: -9% in May.

• Surveyed employer sentiment for short-term permanent hiring this quarter (April–June 2026) stood at net: +9%, which is five percentage points higher than the last quarter (February-April 2026).
• The balance of medium-term permanent hiring rose by four percentage points to net: +10% between April-June 2026.
• In both permanent hiring cases, medium-sized organisations (50–249 employees) expressed the most positive sentiment.
• Overall sentiment among surveyed employers for short-term temporary staffing for April-June 2026, stood at net: +3%, which is up two percentage points from last quarter (February-April 2026). The sentiment is up after a decline of four consecutive quarters.
• Medium-term temporary hiring intentions sentiment has stagnated in the previous two quarters sitting at net: +5%.
• Medium-sized organisations were the most positive in temporary hiring.

Notes to editors

JobsOutlook is produced by the REC in partnership with Whitestone Insights. Till October 2024 it was in collaboration with Savanta ComRes, but from November 2024, to improve the sample size and the robustness of the data REC is partnered with Whitestone Insights. 707 UK employers participated via online survey in the JobsOutlook survey, which was conducted between 13^th April and 30^th June 2026. Data were weighted to be representative of UK adults in employment by region, broad industry sector, and public/private split. Whitestone Insights is a member of the British Polling Council and abides by its rules.