London firms are getting more optimistic about plans to hire more staff this year, new figures show, but most companies still have no plan to up their headcounts.
The KPMG and REC London labour-market pulse check, supported by BusinessLDN, rated London’s hiring outlook at 40.4. That’s an improvement from April’s 35.3, but still remains firmly below 50, which is the cut-off for negative sentiment.
The REC’s Jobs Outlook survey, meanwhile, found that 26% of companies in London are looking to increase their permanent headcount over the next three months.
The growth was driven by hospitality, where roughly half of companies are looking to hire more, up from just over a third, as well as life sciences, where the proportion of firms hiring doubled to 37%.
Muniya Barua, Deputy Chief Executive at BusinessLDN, said: “After a torrid period for the hospitality and retail sectors, it’s good to see signs of renewed confidence with firms recruiting for the crucial summer season.
“But rising interest rates and stubborn inflation will act as a drag on consumer spending and could yet test the resilience of London’s job market.
“The Government should back growth-busting measures, such as restoring VAT-free shopping for international shoppers, alongside action to get more Londoners into available jobs, including improving careers advice for all ages, reforming the apprenticeship levy to boost take-up and plugging gaps in its childcare support package.”
Neil Carberry, Chief Executive at REC, said: â “While activity is still dropping in London, we are coming off a post-pandemic boom. We have a way to go to overcome labour shortages.
“Because of that pay growth is likely to remain strong, especially in view of this week’s inflation numbers. We still see shortages of logistics, construction and hospitality workers in London, as well as too few nurses and social workers.
“Employers should lean on recruiters who can make the difference by helping them find, attract and retain workers in new ways, and tap into different pools of candidates. Skilled professionals are especially in demand right now, so firms have to get their offer right.
“We can achieve more sustainable growth and stable inflation by addressing shortages now. That starts with action on skills and immigration, but also speeding steps on childcare, transport and back-to-work support, as set out in the REC’s Overcoming Shortages report.”
