New found confidence may be compromised by coronavirus says ManpowerGroup.

After a string of Brexit false starts and the UK’s third general election in five years, employers are set to increase hiring on the back of newfound political certainty, according to the Q2 ManpowerGroup Employment Outlook Survey. However, the spread of the COVID-19 coronavirus may put the brakes on this new-found confidence.

ManpowerGroup’s survey asks 2,101 UK employers whether they intend to hire additional workers or reduce the size of their workforce in the coming quarter. Employers in all sectors across the UK intended to take on staff in the second quarter of 2020, bringing the national Outlook to +4 per cent. The picture was particularly bright in the North of England where employers in regions such as Yorkshire and the Humber reported an Outlook of +12 per cent.

“The good news is that UK employers have been buoyed by greater clarity over Brexit after December’s general election – and a level of political stability not seen since before the 2016 referendum. Q1 was the weakest outlook in nearly a decade, but the data for Q2 had bounced back to +4 per cent,” said Mark Cahill, managing director, ManpowerGroup UK. “This is a good indicator of employer hiring intentions that we hope will continue.”

The survey was conducted before the COVID-19 (Coronavirus) escalated globally. Cahill added: “While it is too early to predict the potential impact of Covid-19 on hiring, we are hearing from employers with global supply chains that they are considering altering their hiring plans to take account access to materials, slowing business demand and staff availability. The UK has faced a great deal of uncertainty in recent years and employers have remained resilient in the face of previous challenges; early indications from our clients suggests employers remain calm and are preparing their contingency plans.”

Cahill continues: “The regional Outlook for the second quarter of the year was particularly striking. The government’s efforts to spread investment across the country saw the North of England doing much more than “levelling-up” its hiring intentions. We were seeing a significant uplift in demand for staff in import and export hubs such as Grimsby as trade was beginning to pick up again. This was having a positive impact on the region, with Yorkshire and the Humber going from negative territory at the start of the year to +12 per cent this quarter, reaching its highest level since before the 2008 financial crisis. Similarly, the North East went from -4 per cent to +7 per cent and the North West is at +4 per cent.”

However Cahill was alarmed by the performance of the capital over this time period: “While the north of the country was off to the races, it is worrying that London had slumped even further to -2 per cent, the first time we have recorded a consecutive negative Outlook in the capital since 2009. There are significant headwinds in London’s financial sector as looming IR35 rule changes are causing real issues. In a month’s time responsibility for assessing the tax status of contractors will shift from the individual contractor to the company that hires them. Finance sector contractors are particularly affected, and the likes of Barclays, Lloyds, Morgan Stanley and RBS have already announced that they will stop hiring limited company contractors in order to avoid any risk associated with the reforms. At a time when the UK needs to be attracting and retaining the best talent in a competitive global jobs market, the legislative changes could be extremely challenging.”

Hiring in the Utilities sector was predicted to rise to a chart-topping +9 per cent. But the sector was not necessarily in rude health, argues Cahill: “While we were seeing a rebound following the 15-year low last quarter as nationalisation fears during the 2019 election campaign disappeared, the sector remains under ever more hiring pressure. Scottish Power has recently invested a record £2 billion in its renewables business to expand its operations off the Norfolk coast, generating a significant number of jobs. Huge ongoing infrastructure projects such as Hinckley Point means the finite supply of highly skilled talent is stretched even further.”