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 Omicron variant derails UK employer confidence in economy 

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REC says employers need to rethink hiring processes to mitigate skills shortages 

According to a survey conducted by the REC’s JobsOutlook, business confidence in the UK economy fell by 9%.  

This is the first time since February/ April 2021 that the barometer has fallen into the negative, indicating that confidence in the economy is waning. Uncertainty around rising inflation, labour shortages and the Omicron variant has increased over the past three months and this appears to the be the reason for the drop.  

Business confidence in making hiring and investment decisions continued to improve with a higher proportion of firms saying their prospects were still improving. However, that growth in confidence weakened slightly, falling by two percentage points to net: +11.  

According to the survey, growing uncertainty has led to an increase in demand for temporary workers increasing to net: +15 for the next three months; with demand for the next 4 to 12 months also rising by nine points to net to +14. 

Hiring intentions for permanent staff remained robust at net: +21, both in the short term and in the medium term. 

The survey also reported that in November, shortly after the end of the furlough scheme, 51% of employers had seen no change in the availability of candidates for vacancies.  

Kate Shoesmith, Deputy CEO of the REC, commented: “While the next few weeks are likely to be bumpy, we anticipate a highly competitive labour market in early 2022. There will be particularly high demand for temporary work, which helps businesses to manage uncertainty and keep people in work during tough times. Firms will have to look seriously at their recruitment process and their offer to candidates to attract the staff they need. Recruiters are ideally positioned to help with this.” 

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