Service sector recruitment faces gloomy six months
Thursday, January 30, 2003The service boom that has been driving the economy could be at an end, results for this quarter’s Recruitment Confidence Index suggest.
The index, which predicts recruitment activity over the next six months, has plummeted among service sector employers and now stands at 108 compared to 160 three months ago.
Predictions for staff turnover in the service industries also suggest a slump in recruitment activity. Last summer employers forecast a hike in staff turnover but the past six months have seen predictions for turnover drop to negative figures. [net percentage of -7]
Service sector employers are also increasingly gloomy about business conditions and business confidence in general is down. A net figure of +40 per cent of service sector employers are optimistic about the future compared with +54 per cent in the autumn.
The RCI has been produced every quarter for the past three years by Cranfield School of Management and the Daily Telegraph.
Commenting on this quarter’s findings Shaun Tyson, Professor of Human Resources at Cranfield School of Management said: “Different industries within the service sector are suffering from different problems.
“A levelling of house price rises could have helped cause the very average Christmas that retailers experienced. But financial services are primarily suffering from the fall in the stock market and the lack of profitability among firms.”
One positive note in this quarter’s figures is that service sector employers are expecting the number of managerial/professional staff to rise over the next six months. This is coupled with a prediction that customer services and sales managers will be in demand.
“It could be that firms are looking for people who can leverage existing client and customer relationships,” Professor Tyson says.
Manufacturers are surprisingly optimistic about the future, compared with the service sector. The index shows only a four-point dip in predicted levels of recruitment among manufactures, and
well over half remain confident about the future. In addition there has been a sharp rise in the net percentage of manufacturers expecting business conditions to improve over the next six months. This has gone up to +33 per cent this quarter from +5 per cent three months ago.
Daily Telegraph recruitment sales manager Nick Hill said: “RCI results for manufacturing have been borne out by the Daily Telegraph’s figures for quarter four of 2002 and the first month of 2003 which appears to show that the market is flattening.
“We’ve entered the New Year on an encouraging note. If manufacturing recruitment can stay flat for the next six months, then I think we’ve weathered the worst. However, I expect it to remain flat for a further six months after that.”
- Notes for editors:
- The Recruitment Confidence Index is a quarterly survey of public and private sector employers that measures expected changes in recruitment activity and business conditions during the next six months. It also looks at recruitment methods, skills shortages, staff turnover and pay rates. The RCI was set up three years ago by Cranfield School of Management and the Daily Telegraph and is currently produced in association with Personnel Today.
- The RCI predicts changes in recruitment activity in the next six months. Values larger than 100 imply an expected increase in recruitment activity. Values less than 100 imply that recruitment activity will fall. When the RCI indices reach values close to 100, recruitment activity is expected to remain stable.
- The current RCI figures for winter 2002/03 stand at 119 for all staff and 113 for managerial/professional staff. This is down from 143 for all staff and 134 for managers/professionals, three months ago.
- Net percentages are calculated as the difference between the percentage of organisations reporting an increase less the percentage reporting a decrease. For example in the current survey, winter 2002/03, 45 per cent of manufacturers predict that business conditions will improve while 12 per cent expect them to worsen, resulting in a net improvement of +33 per cent.
- The full report is available to the public, price £50. To obtain a copy contact Dr Emma Parry, Cranfield School of Management on 01234 754808 or e-mail firstname.lastname@example.org
- For further information contact Helen Fulcher, Press and PR Manager, Cranfield School of Management on 01234 754425 or e-mail email@example.com