Temporary labour market helping to kick-start recovery

This article was written originally as the special feature in the September 2020 edition of Report on Jobs. Find out more about Report on Jobs here.

While times are still tough, with the economy continuing to open up slowly, there are encouraging signs of recovery after COVID-19. And activity has started to increase in the labour market as part of that – especially for temporary staffing.

Our latest JobsOutlook survey shows that things have started to improve in a number of different ways, and the most important of those is confidence. While confidence levels are still low, they have been rising since the record lows of April and May. Between March and July, employers’ confidence in the UK economy improved by 22 percentage points, while their confidence in their ability to make hiring and investment decisions rose by 25 percentage points.

The same is true of hiring intentions. In April and May, more businesses were expecting to decrease their staffing levels than increase them. Those are now back in positive territory again, and employers expect to be taking on new staff in the coming months. In May-July, intentions to hire permanent staff in the short term reached net: +5. The number of online job adverts has also been steadily increasing, and in the last week of August, there were 1.12 million adverts active in the UK.

Recruiters have been telling us that they expected the temporary staffing market to rebound quicker than for permanent staff, and interestingly, that is starting to be reflected in our employer survey too. In the three months to July, employers’ intentions to hire temporary agency workers in the short term were at net: +6, the highest level since October-December 2019. It is also the first time that businesses have been more positive about hiring agency workers than permanent staff since mid-2018.

This trend can be seen in the roles that are being advertised as well. Over the past several weeks we have seen significant rises in job adverts for blue collar roles such as LGV drivers, as well as construction workers and skilled trades like carpenters, bricklayers and roofers. These are roles where temporary work is relatively common. Meanwhile, the number of job postings for white collar professionals, who are more likely to be in permanent positions, have been much slower to recover.

In times of crisis, the UK’s flexible jobs market has been one of its greatest assets, ensuring that workers and businesses have options. Temporary work becomes increasingly important for businesses in the recovery period after a crisis – it allows them to create jobs sooner, bring in the skills they need quickly and adapt to a rapidly-changing environment. In the three months to July, two-thirds (67%) of employers said that temporary agency workers were important for short-term access to key skills, up from 53% in the three months to March, before the pandemic hit.

Previous REC research has also shown that temporary roles are important for workers. Two in five Brits have done temporary, contract or freelance work during their life, and the vast majority do this by choice. Many do it as a quick way to find work and earn money, while others use it as a stepping stone into a permanent role.

Temporary work is a vital asset for businesses and workers in the UK, and it will play an important role as the UK strives to bounce back.