UK employers looking to boost staff numbers in Q4 2021

Employers in the UK have ambitious plans to increase their headcount at a record rate as they enter the fourth quarter, according to the latest ManpowerGroup Employment Outlook Survey. As London powers ahead of other regions, the national Outlook is at an all-time high of +32%, a 39-point increase compared to Q4 2020 as the UK adapts to life post-lockdown. Similarly, all sectors have swung back from negative Outlooks in 2020 to record highs for this coming quarter.

The ManpowerGroup Employment Outlook Survey is based on responses from 2,033 UK employers. The research asks employers in the UK if they intend to hire additional workers, maintain current headcount or reduce the size of their workforce in the coming quarter (October to December). This coming quarter, a record, half of all employers (50%) intend to increase headcounts.

“The labour market has roared back to life for the fourth quarter, and it has topped last quarter’s already record Outlook to hit +32%,” said Chris Gray, Director, ManpowerGroup UK. “This follows the rapid vaccine rollout across the UK and the end of restrictions this summer.

“However, the market is still reeling from Brexit and the turmoil of the last 18 months and demand for talent is fast outstripping supply. The economic rebound and growth in hybrid working means employees are being more selective about where they choose to work and are being presented with far greater opportunities than before. It’s a perfect storm.”

Gray continues: “More than a quarter of employers in the UK are increasing wages as an incentive to fill roles, however we need to see a comparable rise in productivity to sustain these wage bumps. Some are turning to other benefits to entice new workers, we’re seeing many offer joining bonuses, additional annual leave, enhanced training opportunities and hybrid working options – such as employees selecting their own shifts.

“These non-financial incentives are particularly popular in industries such as hospitality and retail where profit margins don’t allow significant wage increases. Some of these changes aren’t sustainable as a long-term solution to the talent gap. Employers need to think carefully about their potential to upskill and reskill workers in preparation for potential ongoing talent supply issues.”

London’s Outlook was the lowest of all regions in Q4 of 2020 (-13%), however businesses in the capital now have one of the highest Outlooks at +40%, a 53 percentage-point increase year-on-year. The Outlook in London correlates with the finance and business services sector as the industry’s intention to hire is also breaking records, with an Outlook of +46%.

Gray continues: “As London represents a quarter of the UK’s economic output, strong hiring intentions in the capital bodes well for the economy as a whole. Although a third of employers plan to offer hybrid working, people are returning to offices, amid an expected rise in hybrid home/office work in Q4, as a third of employers plan to offer flexible working locations. Employers across London are anticipating this shift, with coffee shops, restaurants and retailers all expecting a surge in footfall which goes hand in hand with increased demand for staff.”

Elsewhere in the UK, firms are similarly keen to increase headcounts in the coming quarter, many are trying to hire their way out of a backlog caused by the last 18 months of turmoil. Gray added: “Take the Utility sector, reporting a huge surge in hiring, up 38 percentage points to +46% for the coming quarter.”

“What we’re hearing from our clients in this sector is that UK homeowners have been reticent to let people into their homes during the course of the multiple lockdowns, meaning meter readings and upgrades have been put on pause. With restrictions now relaxed energy companies are pushed to meet the backlog before the end of the year and turning to temporary staff to meet demand.

“Yet across the UK temporary roles are just as hard to fill as permanent ones, as a result 42% of employers are changing their terms and offering a ‘choose your own shift pattern” to remain competitive.”

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