The shock outcome of June’s Brexit referendum was widely expected to have a dramatic impact on the UK labor market, but the market has been sending mixed signals. In the immediate aftermath of the vote, many employers froze hiring and many employees began looking for work outside the UK, while CEB’s TalentNeuron detected a sharp drop in listed job openings. Employees have also expressed anxiety about their futures. On the other hand, a Totaljobs study released last week found that most employers did not anticipate putting off hiring plans or freezing recruitment.
The latest data, however, are not encouraging. A survey released on Friday suggested that hiring for permanent positions fell last month at the fastest pace since May 2009, Reuters reports:
The monthly report from the Recruitment and Employment Confederation (REC) showed starting salaries for permanent jobs rose in July at the slowest pace in more than three years. Overall, the survey added to evidence that business confidence and activity slowed sharply after the June 23 vote to leave the European [Union].
“The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009,” said REC chief executive Kevin Green. “Economic turbulence following the vote to leave the EU is undoubtedly the root cause.” The survey suggested businesses were focusing more on hiring short-term staff because of the uncertainty.
The CIPD has been hearing a similar story from employers, Sophie-Marie Odum adds:
Apparently not, according to last month’s Totaljobs Employment Index:
[A]lmost three-quarters (72%) of [UK] employees say they have not been spoken to by their employer about the impact of Brexit. Just 18% of employees said their employer had talked to them about the impact of Brexit on the business they work in, and one in 10 have been spoken to about the impact of Brexit on them personally. One in four (24%) businesses said they haven’t communicated with employees on the impact of Brexit as they don’t know what they should be saying.
The Totaljobs report also indicated that 54 percent of employers won’t put off their hiring plans because of the Brexit vote, 61 percent don’t think the referendum will impact their ability to attract or retain talent, and roughly two thirds of UK businesses don’t think they’ll have institute a recruitment freeze either. But while a organization’s hesitancy to communicate uncertain information to its workforce is understandable, something as potentially monumental as Brexit is a great example of the need to constructively communicate that uncertainly to employees, especially since they are undoubtedly already having conversations about the possible ramifications amongst themselves.
(CEB Corporate Leadership Council members can learn more about how navigate Brexit-like changes here.)
A new survey from the CIPD shows that many UK employees are worried about their futures in the wake of June’s Brexit referendum:
In a CIPD survey of 1,045 UK workers, 44 per cent of respondents said they felt pessimistic about the future. This was particularly high among public sector workers (61 per cent), voluntary sector workers (58 per cent) and those aged 25-34 (63 per cent). Just 3 per cent felt more secure in their job since the Brexit vote was announced on 23 June. … A total of 22 per cent of employees said they felt less secure in their role as a result of the referendum (rising to 33 per cent in the public sector), while 21 per cent felt they needed to learn new skills. …
Job uncertainty has rippled through many sectors since Brexit. In announcements made late last week, Lloyds Banking Group said it planned to cut 3,000 jobs and close 200 branches despite doubling its pre-tax profits. But McDonald’s said it was creating 5,000 jobs, and dismissed concerns about the fallout from the Brexit vote.
There have also been signs of brain drain at the executive level. At TLNT, executive recruiter Dave Heilbron relays what he’s been hearing from high-level professionals exploring opportunities outside the UK:
CareerBuilder says this year’s batch of college graduates is looking at the best entry-level job market in a decade:
According to a new survey from CareerBuilder, 67 percent of employers say they plan to hire recent college graduates this year, up from 65 percent last year and the highest outlook since 2007. More than a third (37 percent) plan to offer recent college graduates higher pay than last year, and 27 percent of employers hiring recent college graduates this year will pay a starting salary of $50,000 or more. …
While prospects appear better, some employers are concerned that new college grads may not be ready for the real world. Twenty-four percent do not feel academic institutions are adequately preparing students for roles needed within their organizations, an increase from 21 percent last year.
For all that the hiring outlook has improved for newcomers to the workforce, the job market for young workers is still very different than it was before the Great Recession. Aimee Picchi at CBS Moneywatch points to a new study from the Economic Policy Institute that paints a much less rosy picture for the class of 2016:
Writing at HRE Online, Peter Cappelli questions whether the much-touted “gig economy” is really the new normal in the US economy, or “just a hangover from the worst economic downturn since the Great Depression”:
I suspect that the independent-contractor numbers are still the result of the hangover. Lots of these folks don’t have much work, but they would prefer to think of themselves as independent contractors and “consultants” instead of unemployed. There is something else going on here, though, and it’s been under way for a while. That has to do with finance and accounting and what seems to me to be a misunderstanding as to how these work arrangements actually operate.
Tea buds (Simon Tang/Shutterstock)
Jobless claims fell last week to their lowest level in over 40 years, Victoria Stilwell reports at Bloomberg, “indicating the U.S. labor market remains a pillar of support in the world’s largest economy”:
New applications for unemployment benefits fell by 6,000 to 247,000 in the week ended April 16, data from the Labor Department showed Thursday. The median forecast of economists surveyed by Bloomberg called for 265,000 claims. The number of Americans already on benefit rolls declined to a more than 15-year low.
Limited dismissals signal that employers are still optimistic about the U.S. demand outlook. The drop in claims occurred in the same week the Labor Department surveys for the monthly employment report, and economists are banking on further job growth to support consumer spending and help prop up economic growth after a weak first quarter.
“Claims are probably the single best indicator of the health of the economy,” said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, whose forecast for 252,000 was among the lowest in the Bloomberg survey. “We assume the labor market will continue to outperform most measures.”
Stilwell’s colleague Rich Miller, however, warns that a recession could be closer than it appears. “Take a peek below the headline jobs data,” he writes, “and there are signs that the labor market is losing some momentum”:
CareerBuilder’s latest job forecast finds that the US workforce is just as restless at the start of the second quarter as it was at the turn of the new year, with 25 percent of employees saying they plan to change jobs this year:
Good timing, too: 34 percent of employers are planning to hire full-time, permanent employees over the next three months. Even more — 37 percent — plan to hire temporary or contract workers. The outlook isn’t just good news for those who want to change jobs, but also for college students on the cusp of graduation as well as those who want to re-enter the workforce. …
CareerBuilder surveyed more than 2,000 hiring managers and human resource professionals and more than 3,000 full-time employees nationwide for its latest forecast, which also looked at past hiring trends. According to the forecast, hiring in the first three months of 2016 outperformed the same period in 2015, with 37 percent of employers hiring full-time, permanent employees – up from 35 percent last year.
Overall, it still looks like employees are back in control of the labor market.