Labour tightness refuses to budge as skills shortages and wage growth remain
Almost two thirds (60%) of workers optimistic about their job security in the next six months
Pay optimism rebounding into positive territory up 23.1 points
Robert Half warns latest data suggests a perfect storm is brewing that risks inflation woes persisting
A combination of economic inactivity, falling labour productivity and stubborn wage growth are creating a potential ‘perfect storm’. That’s according to the latest Robert Half Jobs Confidence Index (JCI) – an economic confidence tracker produced in partnership with the Centre for Economics and Business Research (Cebr).
According to the latest iteration of the JCI, skills shortages are fuelling bullish attitudes from workers, pushing up pay confidence as optimism in the macroeconomy increases, which is putting greater pressures on employers and which could potentially signal trouble for the Bank of England.
The latest data from Robert Half revealed an uptick in job security confidence, with 60% of the workforce optimistic about their prospects in the next six months – the highest job stability reading since Q1 2023. Meanwhile, pay confidence also spiked, up 23.1 points, bringing this pillar back into positive territory. This represents the strongest quarterly gain of all four pillars in the JCI.
Overall, the Jobs Confidence Index rose 5.3 points in the second quarter, up to 51.6 – the highest reported in almost two years. A reading between -30 and 30 is considered a ‘normal’ rate of confidence. According to Robert Half, these persistently high levels of job and pay security are reflective of the on-going impact of skills shortages that put workers in the driving seat.
Matt Weston, Senior Managing Director UK & Ireland, at Robert Half commented:
“Labour market tightness remains unchanged as a slight decline in unemployment was matched by a continued decline in vacancies. Much of this tightness can be attributed to high levels of economic inactivity since the pandemic creating a dearth of much need skills. As a result, worker job confidence is on the rise and wage growth, although declining, is tracking above inflation. However, the issue underpinning worker confidence is the ongoing skills shortages we are facing.
“Skills shortages harm employers, and hinder company – and therefore national – growth prospects, productivity, and innovation. Conversely, the demand for skilled talent continues to keep the ball in workers' courts where bargaining power is concerned. Armed with confidence in their niche skill sets and experience, today’s confident workers can jump ship to pursue new opportunities if their employer doesn't meet their reward and career expectations. Without increased support from the Government and businesses, systemic skills shortages combined with the tight labour market risk wage growth that could see inflation creeping back up once again. This could cause a significant drag on economic prospects at odds with the growth agenda.”
Ends.
About the research
In partnership with the Centre for Economics and Business Research, the quarterly Robert Half Jobs Confidence Index is the most authoritative report on the key socio-economic factors influencing confidence in the UK labour market.
The Jobs Confidence Index (JCI) is made up of four equally weighted pillars, each measuring a factor which contributes to jobs confidence. These are:
Job security confidence
Pay confidence
Job search and progression confidence
Macroeconomic confidence
The JCI takes a positive or negative number, where numbers above zero signal that jobs confidence is higher than the long-term average, and numbers below zero show it is lower. The JCI can take any number, but it usually stands between -30 and 30, showing that confidence is close to a normal level when it is within this range.
Robert Half (NYSE: RHI) is the world’s first and largest specialised talent solutions and business consulting firm, connecting highly skilled job seekers with rewarding opportunities at great companies. We offer contract talent and permanent placement solutions in the fields of finance and accounting, technology, marketing and creative, legal, and administrative and customer support, and we also provide executive search services. Robert Half is the parent company of Protiviti, a global consulting firm that delivers internal audit, risk, business and technology consulting solutions. In the past 12 months, Robert Half, including Protiviti, has been named one of the Fortune® Most Admired Companies™ and 100 Best Companies to Work For and a Forbes Best Employer for Diversity. Explore talent solutions, research and insights at www.roberthalf.com/gb/en.
