UK Jobs Confidence is growing: but what does this mean for recruitment?

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Every quarter Robert Half and the Centre for Economics and Business Research (Cebr) publishes the Job Confidence Index (JCI) – an in-depth analysis on the stability and future prospects of the UK employment market, based on data on job creation, security and career progression. The latest Jobs Confidence Index release paints a picture of a dynamic and highly complex labour market that’s still battling the after effects of a number of macroeconomic events including the coronavirus pandemic and Brexit, along with other social and political challenges. The data shows that, on one hand, two-thirds of workers feel confident about their job security over the next six months against a backdrop of ongoing, and potentially worsening, skills shortages. However, concurrently, they are dissatisfied with real earnings with cost of living and inflationary pressures having a major impact. With an uncertain environment, it can be difficult for business leaders to plan over the long term, but what does the JCI reveal about confidence in the UK job market?

The data from the latest iteration of the JCI reveals a dynamic and complex labour market. Overall, the JCI currently stands at 29.4 for Q1 2023, representing the highest level since Q2 2022 and showing an increase of 9.5 points on the previous study. This is in deep contrast to other developed labour markets, where jobseeker confidence has fallen. The Job Security Confidence pillar represents the largest growth area, rising by 35.3 points to 140.3, the highest reading ever recorded. Over half (62%) of the workforce revealed that they felt assured in their job security, with confidence boosted by ongoing skills shortages and improvements in macroeconomic confidence, which rose 23.1 points quarter-on-quarter at the beginning of 2023.

However, despite the positivity in this area, confidence in pay has taken a hit as the cost of living crisis and other macroeconomic pressures bite further. This particular pillar has declined by 29.1 points since our last study and currently sits in negative territory at -36.6. While average total pay has risen by 5.8% annually, it has actually dropped by 3% in Q1 2023 when adjusted for inflation. This won’t come as too much of a surprise to many readers who are likely to have felt that their pay just isn’t going as far as it once did.

Back on a positive front, the job search and career progression pillar of the JCI recorded the second strongest reading at 35.2, up by 8.6 on the previous quarter where the figure stood at 26.6 points. The drivers behind the latest rise include the improvement in career progression confidence - with 45% saying they feel confident or very confident in future career prospects, underlining the ongoing skills shortages that also boosted job security confidence findings. Just under a third felt neutral, and only 19% felt unconfident.

And finally, macroeconomic confidence also improved considerably in the first quarter for businesses and consumers. While the figure remains in negative territory, the broader positive movement showcases the resilience of UK employees and enterprises in the face of a challenging economy. This metric rose by 23.1 points to -21.4, representing the biggest rise since the pandemic in Q2 2021.

The CEBR/YouGov Consumer Confidence Tracker also rose to 99.4 in Q1 2023, an improvement on the 95.2 reported in the previous report, but still down on a year earlier, suggesting that the UK is over the worst of financial conditions whilst still remaining in choppy waters. The cost-of-living crisis has, again, had a negative impact on consumer confidence, but overall, the outlook has improved compared to Q4 2022 with results aligning with findings from the CEBR/BDO Business Optimism tracker which returned to positive territory this year.

It's clear that we remain in a candidate-led market – and professionals are increasingly aware of the power they have in this environment, which is boosting job seeker confidence. Adapting recruitment and retention strategies in this environment will be tough, but not impossible.

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