Employer confidence in hiring returns to positive territory for the first time since the beginning of 2022, according to new Recruitment & Employment Confederation (REC) data.

In February-April 2023, the net balance of employers’ confidence in making hiring and investment decisions was +2 – restoring to positive territory the first time since January-March 2022. Employers’ confidence in the UK economy has also started to improve to -43 from -51. As confidence improved, employers reported that forecast demand for both permanent and temporary workers in the next 3 months rose to +18. Hiring intentions for permanent staff in the next 4 to 12 months also rose to +21 from +19. Forecast demand for temporary agency workers in the next four to 12 months, however, decreased slightly to +9 from +12. This may reflect firms feeling more able to make permanent hires.

Neil Carberry, Chief Executive of the REC, said:

“This data is good news – it shows firms starting to feel more confident again. Employers always feel more confident in the business they know – their own – so it is no surprise that views of the wider economy are lagging a bit. But a return to hiring is likely to re-emphasise the people and skills challenges we face. As the REC has pointed out, the UK could leave £39 billion of prosperity on the shelf – two Elizabeth Lines, every year – unless we can tackle the structural challenge we face on productivity and labour supply.

“Businesses across the country need to step up on their workforce planning to grow effectively – recruiters are there to help them with that. But we also need government action – from skills reform to immigration and employment regulation. As part of a cohesive industrial strategy, we need to start putting the people stuff first.”