Winter 2000 / 2001 Executive Summary
The first RCI index was launched in Winter 1999/00 using a postal survey. Since then we have received 3491 responses. The current report is based on 3157 responses (530 responses in Winter 2000/01) from a representative sample of UK organisations with at least 25 employees. Respondents include HR directors/managers, finance directors, managing directors and recruitment specialists.The size of organisations analysed in this report ranged from 25 to more than 100,000 employees, with about 50% having at least 250 employees in every survey. Of the organisations that participated, almost 50% belong to larger companies, ranging in size up to 1,000,000 employees. To ensure a representative picture, the results have been weighted according to industry, region and size. Finally, in this report, services refer to organisations in the service sector.
Employment trends
So, what are the key themes, trends and prospects within the employment market? And, what is the sharp-end experience of organisations in terms of labour supply and demand?
The main results can be summarised as follows:
The RCI predicts strong increases in recruitment activity and employment. In most functions, expected employment growth is slightly higher than reported in the previous quarter. The net percentage of organisations expecting an increase in employment jumped from 34% to 40%. Some indicators show that organisations expect the strong employment growth to cause problems. In particular, the percentage of organisations expecting an increase in unfilled vacancies and staff turnover has increased in the last quarter.
Increases in recruitment activity are expected
Recruitment activity is expected to increase still further over the next six months. The Recruitment Confidence Index stands at 144 for all staff and 134 for managerial / professional staff. Furthermore, respondents expect activity to increase at a higher rate than before for all staff and at managerial / professional level.
In the services and manufacturing sector the predicted increases in recruitment activity are strong. Recruitment activity remains higher in the service sector than in manufacturing.
A slightly more confident business outlook
There is an expectation in the business community that trading conditions will continue to improve. Compared to the Autumn 2000 survey, business confidence is slightly more buoyant. The net percentage of respondents who are now optimistic about business stands at +71% compared to +67% in Autumn 2000. Whilst confidence in both sectors has increased, respondents remain more optimistic in the service sector than in manufacturing. 59% of organisations envisage a further increase in demand for their main product / service, whereas five percent envisage a decrease.
Employment growth
More than half of the organisations (54%) expects to increase their workforce in the next six months, whereas only 14% expect a decrease. This increase in demand is also reflected at managerial / professional levels: 37% of organisations expect to increase the number of managerial / professional staff in the next six months, whereas only seven percent expect a decrease.
The strong growth of service sector employment continues to outstrip employment growth in manufacturing, which is expected to be small. In manufacturing 50% of organisations expect an increase in employment and 18% expect a decrease. In the service sector 63% expect an increase in employment and 12% expect a decrease.