Marketers erred on the side of caution when it came to the prospect of hiring at the start of this year as economic weakness restricts investment.
The IPA’s quarterly Bellwether report shows that a net balance of 4.9% of marketers expect their overall employment to be higher in three months’ time compared to current levels. Overall, 22.9% said they expect levels to be higher, 59% that they will stay the same, and 18% that levels will be lower.
While this figure is higher than the record low experienced in the third quarter of 2019 (which came in at just 1.4%) it remains relatively subdued compared to the series trend. In 2019, the net balance of marketers expecting to hire remained in single digits all year, peaking at just 5.1% in the second quarter.
The Q4 2019 figure is also the lowest for the fourth quarter since the IPA began collecting the data.
Employment prospects: Do you expect overall employment to be higher, the same or lower at your company in three months’ time compared to current levels?
|Higher %||Same %||Lower %||Net +/-|
Marketers said that expectations of economic weakness are causing them to restrict hiring. Concerns regarding the UK’s departure from the EU were also raised, particularly around potential shortages of suitably skilled staff.
However, those that were more positive pointed to the Conservatives’ win at the General Election helping to alleviate some uncertainty.
IHS Markit economist and report author Joe Hayes says: “A mild degree of optimism regarding job prospects emerged at the end of 2019, although it was still subdued relative to the series trend. Evidence of caution and hesitancy remained apparent, with 59% of companies expecting to leave staffing levels unchanged.
“A number of panellists expect economic weakness to persist into 2020, subsequently restricting hiring. Nonetheless, some firms saw a positive side to recent political development. Anecdotal evidence suggested that the imposition of a government with a working majority helped to alleviate some uncertainty, speeding up investment and decision-making relating to business activity such as hiring.”
A cautious approach to hiring comes amid pessimism among marketers about the financial prospects of the industry in which they work. A net balance of 21% of marketers expect conditions to get worse – with 33.7% feeling downbeat and just 12.7% taking an optimistic view.
However, their feelings about the prospects of their own company improved and returned to positive territory. Overall, 1% of firms anticipate growth in their business, the first time panellists have been optimistic overall since Q3 2018 and a notable upswing from the previous quarter, when a net balance of 9.4% expected conditions to worsen.