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Political uncertainty main challenge facing employers

According to the REC, employers are concerned about political uncertainty and skills shortages

Political and economic uncertainty caused by Brexit are the main challenges facing employers, according to the February Jobs Outlook report by the Recruitment and Employment Confederation (REC).

In the REC’s monthly survey of employers 36% said such uncertainty was the main challenge facing their business. Despite this, the number of businesses expecting the economy to improve rose three points to 33%.

Kevin Green, chief executive of the REC, told HR magazine: “Brexit is our new reality and I think rather than being encouraged by any single factor, people are getting used to the fact that this is how things are.”

Green added that the current climate is influencing a lack of job market movement. He said: “There are signs that individuals are becoming less inclined to move jobs, meaning that filling vacancies is becoming even more difficult.”

Separate research commissioned by Ricoh Europe backs this up. It surveyed employees across 17 European countries and found just 4% of UK respondents said they expect to change jobs in 2017.

The triggering of Article 50 will do little to change the temperature of the market, said Green. “In reality it will be a blip rather than a fundamental sea change,” he said. “Nothing is going to change for another two years and I think businesses are getting used to that.”

Skills shortages remain a problem, with a shortage of suitable candidates chosen as the main challenge for 21% of businesses, while 14% cited lack of skills in their organisation.

The Jobs Outlook raised concerns about the falling numbers of EU nationals coming to the UK to work. It highlighted industries such as healthcare and hospitality as sectors that depend heavily on EU migrants.

Green urged the government to take action. “All of this amounts to more pressure on business,” he said. “The government can take positive steps to ease the strain by delaying the immigration skills charge planned for April and tax changes to IR35 in the public sector."

Concerns aside, Green said there was much to feel positive about. Unemployment is expected to stay at 4.8% and the Jobs Outlook reports that 22% of employers are planning to recruit additional permanent staff in the next three months.

“We’re almost at full employment,” he added. “The government might want to slow down and give businesses a chance to get used to all of the changes so that we can continue employing people.”