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Manpower survey shows jobless recovery remains a strong possibility

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Employer hiring forecasts have fallen into negative territory for the first time in 16 years, new research shows.

The survey from recruiter Manpower confirms the UK employment landscape is re-shaping but the jobless recovery is ever-present. Based on responses from more than 2,100 UK employers, the national results indicate cautious optimism with a seasonally adjusted net employment outlook of +1% reported. 

The finance and business services sector has since been a strong contributor in leading the country back to growth. With hiring intentions of +7% since the beginning of the year, it remains the most positive sector for the third consecutive quarter. 

Construction sector employers continue to report weak job prospects with an outlook of -5%, although employer optimism has improved considerably since its weakest point during the recession of -20%. Manufacturing has improved for the fourth consecutive quarter to reach +2%, which can be linked to the increase in UK exports as the pound continues to weaken.

Mark Cahill, managing director at Manpower UK, said: "At a time when the public sector faces intense pressure to slash spending, its employers must be careful not to incur further financial burden by making short-sighted decisions. Workforce transformation is vital to the future success of the public sector and the challenge for employers is to economise, optimise and transform, without compromising frontline services.

"By following the example of the private sector, where innovative solutions, such as flexible working, internal redeployment programmes and well-managed non-permanent workforces, have supported companies through the recession, the public sector can begin to develop a smart, sustainable talent strategy.

"Employers are recognising that cost-cutting doesn't always mean reducing headcount, and are making smart business decisions such as utilising transferrable skills in the workforce, evaluating the real cost of headcount reduction and pioneering new working practices. For many, overhead savings can be achieved by sharing resources with like-minded organisations, such as administration, HR and finance. This, teamed with the engagement of a flexible workforce, will allow employers to build the necessary business infrastructure to deliver output-focused solutions.

 "The impact of government-imposed spending cuts on both public sector departments and private sector outsourcing is casting a shadow over the UK's gradual recovery. In the private sector there is a real need for immediate and long-term growth to boost the UK's prosperity.  Government investment across the country, which incentivises and supports UK businesses, especially SMEs, will be crucial in helping to rebuild our economy. The challenge for all organisations  - public and private - is to improve output, measure by delivery and re-engineer workforces to meet new and changing needs."

The outlook also revealed employers in the South East report the most positive hiring intentions at +9%. West Midlands employers are the least optimistic at -5%, but this is a considerable improvement on the last quarter (-9%) and may be directly related to the increasingly positive outlook in the manufacturing sector, which is now at +2%. In London, employers report a slight decline in hiring confidence since last quarter to -2%.