It’s been 96 years since the UK last held a General Election in December. For the first time in more than three generations, voters will select their representatives to the UK’s supreme legislative body while also juggling all the usual demands that come in the run-up to the festive season.
The political backdrop to this election is unique, to say the least – the unprecedented circumstances that led to months of Brexit deadlock forced the decision to go to the polls on December 12. With campaigning now in full swing, the rhetoric has gone up a few notches from what previously seemed to have already been maximum volume.
With candidates from all parties drawing their lines in the sand, much of the discussion is focused on tactical voting, cross-party alliances and accusations of posturing for political gain. Brexit stress is threatening to progress into chronic anxiety, with the possibility of a second independence referendum here in Scotland further adding to the uncertainty.
The eventual outcome of Brexit will have profound implications for decades to come, but the tribal political posturing surrounding this process is drowning out other equally grave matters. Few things matter to voters more than their jobs and livelihoods, but this fact is getting lost in the cacophony of Brexit discord.
The latest JobsOutlook survey from the Recruitment & Employment Federation (REC) shows that record low business confidence is hampering what could otherwise be ambitious hiring plans among UK employers.
Reporting on the three months to the end of September, more employers felt that economic conditions deteriorated rather than improved during the quarter. Nearly half – 49% – said things were getting worse versus just 18% who said things were getting better, a net difference of -31 and the joint-lowest reading since REC figures began in 2016.
Despite the gloomy economic outlook, forecast demand for permanent staff continued to edge higher, with 74% of UK employers saying they have little or no surplus capacity in their workforce. Among the largest businesses with 250 or more staff, that figure rose to 82%.
This apparent contradiction is explained in part by lower numbers of EU workers available to fill skills shortages in key sectors such as technology, hospitality and construction, though the REC report doesn’t specifically address this point.
At any rate, none of that spells imminent disaster for the permanent labour market. Of more concern are the figures emerging on the use of temporary and contracted workers, who account for a steadily increasing proportion of UK employment and have historically been a leading indicator on the health of the labour market as a whole.
Having surged by 11 percentage points in June-August 2019, the net balance of forecast demand for temporary agency workers during the coming three months dropped by six percentage points in July-September 2019. The resulting balance of +10 was six percentage points lower than a year earlier.
Looking to the next three quarters thereafter, forecast demand for temporary agency workers in the medium-term was at net +4. This was at the same level as in the previous rolling quarter, but substantially down on the +14 recorded a year earlier.
Given the growing importance of temporary workers as a way for businesses to meet their skills requirements, the government needs to reconsider its plans for IR35, which will see rules about tax for contractors rolled out to the private sector in April of next year.
There has been little to no evidence that IR35 – the anti-avoidance legislation designed to tax “disguised” employees at a similar rate to “proper” staff – has raised any significant amount of money since it first came into effect in April 2000. With a lack clarity and fairness, the extension of these rules will combine with the economic drag from Brexit to further reduce competitiveness in the UK economy.
Sourcing short-term skills will become an increasing challenge in the months to come, which is where the services of an experienced recruitment firm will be of major benefit. More than seven out of ten employers who use recruitment specialists said in the latest REC survey that they were satisfied with their agency partners, rising to 81% among mid-sized businesses.
UK employers are ready and willing to invest in their workforce, but need practical help from a government currently subsumed by political uncertainty. Be they Leave or Remain, the main thing most voters want this Christmas is a job.