Contractors’ Questions: Where is hiring being frozen?
Contractor’s Question: I am aware hiring freezes were flagged up in the REC’s Report on Jobs, for September, by the report's co-author KPMG.
Where in the economy are the hiring freezes or in which sectors do workers including those in IT, stand to be affected, and how do the freezes fit in with -- or go against IT contractor recruitment of late?
Expert’s Answer: Looking at the data in Report on Jobs, what we are seeing is a slowdown in recruitment activity when you compare with what has gone before. But that activity is still in growth month-on-month, in all sectors, including in IT and Computing.
Retention first, then recruitment
Based on our conversations with REC members, they tell us that in many ways 2022 continues to surpass expectations – despite significant and ongoing labour and skills shortages. The search for staff has needed to take on a new urgency and recruiters have had to work with their clients on different strategies, aimed first and foremost at staff retention, then recruitment.
We understand that KPMG were picking up on some of the early market signals that they are getting from their clients, in what has been quite a tumultuous time, politically.
Cost burden-mitigation strategies now underway
Everyone is predicting a further slowdown in the economy overall, and we know from businesses that some are beginning to think about how they manage their ongoing and growing cost burden – not least energy prices.
From talking with recruitment business leaders, I would say that they and their client-businesses want to grow, and the best way they have of growing is by hiring staff. But they struggle with this because of ongoing labour shortages.
No choice for some but hiring freezes, given tax uncertainty
If you factor in a growing cost base for businesses and uncertainty over potential tax rises, some will have no choice but to consider hiring freezes in the future. But our latest (Q3) Jobs Outlook data shows a majority of businesses are not there just yet. As to sectors, those that initially show an impact from a growing cost base are often those that are also directly exposed to diminishing consumer confidence – so retail, potentially hospitality too. But they may be able to weather this a little longer, as Christmas is fast-approaching.
The expert was Kate Shoesmith, deputy CEO of the Recruitment & Employment Confederation.