Hiring confidence has not improved since pandemic, new data reveals

Experts also warn cost of living crisis will ‘inevitably bite’ and affect employment levels

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New data has found employer confidence in making hiring and investment decisions for their own business is stagnating at the same level it was at the height of the pandemic, despite labour shortages.

The latest JobsOutlook report from the Recruitment & Employment Confederation (REC) revealed that in April-June 2022, the REC’s confidence index – which subtracts the percentage of respondents that say they are not confident about the year ahead from the percentage that say they are – hit -13, the same level as April-June 2020 – the height of the pandemic. 

Additionally, business confidence in the economy fell by 40 percentage points from January-March 2022 to -50.


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The report also found that employer confidence in the UK economy and their own ability to invest in their business dropped in Q2 of 2022, with inflation and labour shortages causing widespread concern.

Despite this, the hiring outlook stayed positive; in the short term, hiring intentions for permanent staff decreased by five percentage points to net +23, while demand for temporary workers fell by four points to net +12.

In the next four-12 months, hiring intentions for permanent staff and temporary agency workers both declined by two percentage points from the previous quarter, to +25 and +13, respectively.


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Jonathan Boys, labour market economist at the CIPD, said the results suggested hiring was “strong” but warned the cost of living crisis would eventually hit employment rates.

“There are near record levels of job vacancies and an incredibly low unemployment rate of 3.8 per cent, meaning candidates are few and far between,” said Boys. “What’s more, the redundancy rate is at a record low as employers work hard to retain staff.”

He added that the CIPD’s forward-looking labour market outlook also suggested that hiring intentions remain strong, but warned the cost of living crisis will “inevitably bite, and the Bank of England expects economic growth to slow and unemployment to increase”.

HR consultant Gemma Bullivant said organisations can better attract and retain talent, despite uncertainty and a challenging job market, by getting total reward right. “Getting the total reward offer right, both monetary and non-monetary, has always been important, but is crucial in the current market,” said Bullivant. “This is about the employee value proposition, not simply base pay and bonus. There has always been a range of reasons for people to stay or leave an organisation. Get clear on what all of these reasons are for your organisation.”

In April and June, when asked about four recruitment policies designed to improve equality, diversity and inclusion (I&D), almost one in five employers (18 per cent) had not implemented any of them as part of their hiring process. Encouragingly, 18 per cent were planning on introducing at least one of these policies in the future.

Neil Carberry, chief executive of the REC, said the data emphasises the importance of companies working with professional recruiters on their plans, but pushes the need for better I&D in recruitment. “Part of the solution will be more inclusive recruitment processes, so it’s encouraging to see a fifth of companies pushing in that direction,” said Carberry. “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.”