The Monster Jobs Confidence Index, published for the first time by jobs board Monster.co.uk and the Centre for Economics and Business Research (Cebr), claims that workers and job seekers confidence in the UK labour market has dropped by 10 percent, from 77 percent to 67 percent. The report defines confidence as how an individual feels about their ability to find a suitable job in the short-term, realise their career potential and build a better future for themselves.
The Monster Jobs Confidence Index is a report on the key economic, environmental and cultural factors influencing worker confidence in the UK. It has been created to give a robust and holistic overview of the UK labour market and an indication of how confident workers feel, both in their ability to find a job in the short-term and their long-term career prospects. Employment numbers alone don’t give the full picture when it comes to the state of the labour market.
The Index combines two macroeconomic indicators (consumer and business confidence), ten labour market indicators (unemployment, job earnings security, productivity, social mobility, pay gaps and amount of apprenticeships), and four survey based indicators (future employment confidence, career progression confidence, equality and political landscape).
The productivity factor
Low productivity is causing the biggest negative impact on worker and job seeker confidence, followed by a reduction in jobs vacancies and the number of apprenticeships available. Reductions in general business confidence, consumer confidence, and social mobility have also all contributed to a gloomier outlook for job seekers.
However, an increase in real wage growth had a significant positive impact on worker and job seeker confidence levels, alongside increasing job earnings security. A reduction in the levels of involuntarily part time work and unemployment in the past quarter has also had a positive impact on confidence levels.
A regional perspective
Workers in Wales and the North East are the least confident. Only 44 percent of people in Wales said they felt confident about their job security looking ahead to the next six months. In the North East half (49 percent) agreed with this sentiment. When asked, a third (34 percent) of employees in Wales also felt that if they became unemployed in the next six months, they’d struggle to secure a similar or better job within a reasonable amount of time.
Those in Northern Ireland however are the most confident, with nearly two thirds (61 percent) of people stating they are confident in their job security over the coming six months, with workers in Yorkshire and the Humber coming second, with 53 percent confidence.
When asked about their future career prospects over the next five years, less than half of UK employees feel confident about their ability to progress. Broken down by region, the least confident region is the North West with only 30 percent of people in the feeling confident in their career prospects in the next five years. London topped the results, but still only 44 percent believing that they will in a better position in five years’ time.
The Brexit effect
The Monster Jobs Confidence Index demonstrates that workers in the biotech, research and development and science sectors were the least confident about their career prospects over the next six months. This could be put down to uncertainty that Brexit is having on the amount of projects receiving EU funding.
However, there are some industries where the current landscape has had a positive effect on levels of confidence. When asked, 15 percent of those working in the editorial and writing sector said that they felt more confident about their employment prospects over the next six months as the public’s need for information has provided significant opportunities.
When asked, workers across all sectors felt less confident about their future career prospects over the next five years due to ongoing Brexit uncertainty.
However, there are exceptions to this, with workers within a couple of industries feeling positive about their opportunities over the next five years as their skills will be needed as the UK adjusts to a life post-EU. Over half of people (51 percent) working within business and strategic management feel confident about their career developing over the next five years, whilst 39 percent of lawyers feel the same. Meanwhile workers with STEM skills are feeling more confident about their prospects due to the industry’s need to continually evolve.
The impact on SMEs
Employees at small and medium sized organisations (1-249 employees) are the least confident about their job security over the next six months, with 23 percent saying they felt unconfident. This rose to 25 percent for workers who are employed at micro companies (1-9 employees). In comparison over half (53 percent) of employees at large organisations (250+ employees) are confident about their jobs in the next six months.
This is largely because employees in bigger firms may feel more secure in working for a firm with a larger number of people, and therefore turnover, compared to those in smaller organisations who are concerned that short-term shocks and changes in the marketplace will have a negative impact on their employment.
Looking forward, additional delays to establishing the terms of Brexit will cause additional uncertainty for workers and business owners – further reducing confidence in the jobs market. Continued low confidence will impact both job seekers and employers, and is likely to see low productivity levels maintained.