Employers are increasingly looking to hire temporary workers as recruitment activity picks up with lockdown measures easing, new figures suggest.
A survey suggests a slim majority of employers say they plan to take on both temporary and permanent staff in the next three months.
A narrow majority also said they were confident in making hiring decisions, the first time most responses have been positive since February.
But the latest quarterly poll by the Recruitment & Employment Confederation (REC) is also the first in two years to show more demand for temporary than permanent staff.
The REC said temporary work “allows firms to create jobs when the future outlook is unclear,” and said Britain’s flexible labour market made such hiring easier.
But data from other sources suggests vacancies remain significantly down on pre-pandemic levels, and hiring intentions do not necessarily translate into jobs.
The preference for temporary staff also signals continued caution among firms despite economic re-opening.
The REC’s latest JobsOutlook report shows two-thirds of employers believe economic conditions are getting worse. Business confidence in the wider economy remains “historically low.”
While hiring has picked up, the survey also suggests rising redundancies. Almost one in five private and public sector firms interviewed between May and July said they had made redundancies in the past year.
Restaurant chain Pizza Express, manufacturer Bombardier and retail giant Marks & Spencer (MKS.L) are the latest in a long list of major UK companies to have announced job losses in recent months.
Economists also expect UK unemployment to keep ticking higher this year. They highlight continued social distancing, the winding down of furlough and other government support, the scarring effects of lockdown on firms, and the fading prospects of fast and full recovery.
“While the path ahead is still uncertain, temporary work helps firms create jobs sooner, and helps people who need new jobs get back to earning quickly.”
“Today’s data show that as lockdown eases and the economy recovers, businesses will use temporary work to start to build back. That makes sense, and matches the pattern of previous recoveries,” said Neil Carberry, chief executive of the REC.
Separate data published on Wednesday also showed vacancies are now rising at the fastest rate all year. Ads on jobs site Adzuna rose by more than 50% month-on-month in July, and almost 170,000 new vacancies were posted in the first week of August alone.
Analysis of Adzuna figures by the Institute of Employment Studies (IES) showed vacancies remained down a third on a year earlier, but the gap has narrowed from two-thirds a month ago.
“The overall level of vacancies is now broadly in line with the picture in the early 2010s as we emerged from the last recession,” said Tony Wilson, director of the IES.
The Joseph Rowntree Foundation, which funded the study, called for extra support for areas and sectors where vacancies are recovering slowly and unemployment is high. “The unwinding of the furlough scheme may lead to more people out of work chasing each vacancy,” it said in a report.