The war for talent is quickly picking up, according to a new research report from accounting- and consulting firm BDO. Hiring intentions among UK businesses have risen so strongly over the past months, they now even surpass their pre-crisis levels, and have reached their highest level since 1998.
On a regularly basis BDO keeps track of the economic sentiment among UK businesses. The research looks at a number of areas, including among other employment (‘Employment Index’), productivity (‘Output Index’) and market expectations (‘Optimism Index’). In the latest report, released this week, all three indices show positive developments.
The Employment Index, which predicts companies' hiring intentions in three months' time, rose from 108.8 in June to 109.6 in July, indicating that job creation will continue to accelerate for the remainder of the year. The economy-wide Output Index, which predicts companies' performance three months ahead, rose from 103.6 in June to 103.7 in July. And lastly, the Optimism Index, which predicts businesses' expectations over a six month horizon, rose from 104.8 in June to 105.1 in July, as both services and manufacturing firms reported gains.
"The good news is that the unprecedented growth we've seen in UK employment this year looks set to continue,” says Peter Hemington, Partner at BDO. However, at the same time this will put pressure on the demand and supply dynamics in the labour market, acknowledges Hemington: “We're hearing that services firms are beginning to echo manufacturers in voicing their concerns over a shortage of skilled workers and some construction businesses are already turning business away due to a lack of trained staff. This could bring the stellar growth we're enjoying in the wider economy to a grinding halt if the trend becomes entrenched.”
For students though, the developments represent good news. The forecast from BDO suggests that graduates from the class of 2014, many of whom will be looking to start their careers this summer, face the most encouraging job prospects of any graduation class since the onset of the financial crisis. “The positive outlook will provide this year's university graduates with a welcome dose of good news in terms of job and salary prospects,” concludes Hemington.