Reacting to: Businesses slam brakes on hiring over Burnham uncertainty (City A.M.) →
City A.M. reports this morning that employers are pausing recruitment while they wait to see what direction the next government takes. Recruiter Morgan McKinley's figures show available jobs in London fell 5% in the second quarter compared to the first, with professional vacancies down 3% on a year ago. British Chambers of Commerce research paints a similar picture nationally: fewer than one in four firms plan to grow their workforce, just over one in ten plan to cut staff — and yet nearly three quarters say they struggle to find the people they need. Morgan McKinley's Mark Astbury puts the pause down to political uncertainty following the Prime Minister's resignation, with many organisations delaying recruitment until the government's economic priorities are clearer.
Uncertainty is doing the deciding
Look at those two BCC numbers together and something odd appears. Three quarters of firms can't find the staff they need, but fewer than a quarter plan to hire. That's not a picture of businesses that don't need people — it's a picture of businesses that don't feel confident enough in their numbers to commit to them. When the outlook is foggy, the default decision is no decision, and recruitment is usually the first thing to get parked.
A pause is a decision too — make it with real numbers
For a small employer, there's a more useful response than joining the freeze on instinct. Work out what the hire would actually cost — the full cost, not just the salary (we've just published a plain-English guide to exactly that). Then test it against a cashflow forecast that reflects a tougher trading environment, not the friendliest one. If the numbers work under pressure, hesitating just hands the good candidates — who are more available right now than they've been in a while — to whoever moves first. If the numbers don't work, you've made a real decision instead of an anxious one.
The BCC's Patrick Milnes told City A.M. that "helping businesses invest in skills must be at the heart of their economic plan" — sound advice for the next Prime Minister, whoever that turns out to be. But you don't have to wait for Westminster to get clarity on your own payroll. That's what our Payroll & Pensions service and Cashflow & Budgeting work are for: knowing what a hire costs you, month by month, before you commit — so uncertainty in the headlines doesn't have to mean uncertainty in your business.