Robert Half Jobs Confidence Index: insights that work
In partnership with the Centre for Economics and Business Research, the quarterly Robert Half Jobs Confidence Index is the most authoritative report on the key socio-economic factors influencing confidence and job stability in the UK labour market.
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All the insights you need in one place
The Robert Half Jobs Confidence Index (JCI) analyses the factors determining how confident an individual is likely to feel about their ability to secure employment and fulfil their career potential, whilst creating economic value.
Equip yourself with information about the latest job security, pay, job search and progression trends to support your business strategy or job search. Download the December 2024 JCI today.
Job confidence strong despite headwinds
The Robert Half Jobs Confidence Index increased to 52.3 in Q3 2024, the sixteenth consecutive quarter in which it has been in positive territory.
Job security confidence experienced a slight increase. At 152.2, the pillar was up marginally by 0.1 points on the quarter, remaining the second highest reading on record for this pillar.
Over half (63%) of employees feel confident about their job looking ahead to the next six months. A record high.
Pay confidence takes a hit
The pay confidence pillar experienced 8.0 points decline and now sits at 4.1
A decrease in real wage growth, easing to 1.4% in the year to Q3, was a key contributor.
Labour productivity, measured by output per hour worked, remained unchanged at -0.3% on an annual basis in Q3.
Job search and progression confidence on a steady rise
The job search and progression confidence pillar experienced the strongest quarterly improvement among the JCI pillars, standing at 18.3.
Levels of economic inactivity fell very slightly on the quarter, but remain higher than those seen in the past few years.
The proportion of workers confident about their future career progression rose to 46.6% in Q3, up from 44.6% in the previous quarter.
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Missed our last webinar? Full recording now available!
On Friday 29 November 2024 we ran our eighth quarterly webinar with Christopher Breen, Head of Economic Insight, Cebr, and hosted by Chris Lawton, VP of Permanent Placement Operations at Robert Half.
The JCI Webinar, held on December 2, 2024, provided a comprehensive analysis of the latest findings from the Robert Half Jobs Confidence Index (JCI) in partnership with the Centre for Economic and Business Research (CEBR). Here are the detailed points from the webinar:
Introduction
• Speakers: Chris Lawton (UK) and Christopher Breen (Head of Economic Insight, CEBR).
• Purpose: To discuss the latest JCI data, which provides insights into the UK labour market by examining job creation, security and progression.
Key Findings
1. Overall JCI Score:
• The JCI increased marginally to 52.3, marking the 16th consecutive quarter in positive territory.
• This reflects a slight improvement in the labour market, aligning with broader economic trends.
2. Job Security Confidence:
• Remained largely unchanged with a slight increase of 0.1 points.
• Notable rise in workers' confidence in job security, reaching a record high since 2009.
• Despite a slight increase in unemployment and a decrease in job vacancies, confidence remains strong.
• The percentage of employees confident in their job security over the next six months rose to 63%, up from 61.4% in the previous quarter.
3. Pay Confidence:
• The only pillar to decline, driven by a slowdown in real wage growth.
• Real wages grew by 1.4% in Q3, down from 1.6% in Q2.
• Labour productivity continued to fall, impacting future wage growth potential.
• The pay gaps measure, which looks at demographic pay deviations, worsened during the quarter.
• However, job earning security, which measures income stability, continued to improve.
4. Job Search and Progression Confidence:
• Showed the strongest improvement among the four pillars.
• Increased confidence in future career prospects over the next five years.
• The share of involuntary part-time workers increased slightly to 10.8%, indicating some labour market easing.
• Social mobility, measured by access to professions by education, experienced a marginal decline.
• Levels of economic inactivity fell slightly, showing a positive trend.
5. Macroeconomic Confidence:
• Improved for the fourth consecutive quarter, driven by consumer confidence.
• Business confidence fell slightly, with services optimism trailing behind manufacturing.
• Consumer confidence was driven by forward-looking indicators of job security and household finances.
Hot Topic: Education and Job Training
• Workers' Views:
• The majority believe education is important for career success, but job-specific training is seen as more beneficial for job performance.
• Practical skills and relevant training offer greater job mobility.
• Over two-thirds agreed that skills-based training is more beneficial than formal education for job performance.
• Most respondents view job-specific training as essential for career advancement.
• Employers' Views:
• 61% of SME employers consider a university degree important when hiring.
• Skills-based hiring is seen as beneficial for addressing skill shortages and diversifying talent pools, but many employers still prioritise degree-based hiring.
• Employers cited various reasons for requiring degrees, including signaling basic competency and filtering candidates in competitive fields.
• 40% of SME employers value experience and skills-based hiring more than education-based hiring for identifying candidate potential.
Forward-Looking Commentary
• Economic Growth:
• The UK economy grew by 0.1%, with growth expected to remain below 1% for the year.
• Inflation is expected to stay slightly above the 2% target due to high energy costs and wage pressures.
• The Bank of England is likely to continue cutting interest rates despite inflation remaining above target.
• Labour Market Outlook:
• Real wage growth should remain positive, supporting household spending and labour demand.
• The budget's impact on wages and employment will depend on how businesses pass on increased costs from higher employer NICs.
• The increase in the national living wage will provide a short-term boost to wages.
Conclusion
• The JCI provides a comprehensive view of the UK labour market, highlighting the importance of both education and job-specific training.
• Future reports will continue to monitor these trends and their implications for businesses and job seekers.
Q&A Highlights
• Main Reasons for Increase in Job Confidence:
• Driven by surveyed components of confidence in job security, career progression, and household finances.
• Despite some negative factors like easing real wage growth, overall confidence remains strong.
• Labour Market Loosening:
• There are uncertainties around official data, but various metrics suggest a slight loosening of the labour market.
• Vacancies have fallen, and payroll data indicates a slowdown in employment growth.
• Skills and Hiring:
• Both employers and employees agree on the importance of education, but job-specific training is seen as more crucial for job performance.
• Employers are not significantly shifting towards skills-based hiring despite recognising its benefits.
• Impact of the Budget:
• The increase in employer NICs will likely lead to higher prices, lower employment, or lower wages.
• The labour market's condition will influence how businesses pass on these costs.
The webinar provided valuable insights into the current state and future outlook of the UK labour market, emphasising the need for a balanced approach to education and job-specific training.
Frequently Asked Questions
Why is the Jobs Confidence Index important?
To identify effectively what positive change looks like, we first need to examine and understand where problems lie. The issues of job security, social mobility, motivation and economic inactivity are key to the labour market’s strength. Understanding these can further help the development of fit-for-purpose recruitment and talent management practices. In addition to shedding light on current market trends, the Robert Half Jobs Confidence Index aims to provide actionable insights for employers, employees, job seekers and talent management professionals.
How can the Jobs Confidence Index support employers?
The increasingly complex macroeconomic environment has pushed business leaders to be more innovative when planning and managing people. And this is where trend is friend. By looking at the trajectory of the labour market dynamics, past and present, businesses can devise new strategies for their workforce ecosystem - permanent and temporary, as well as at arms-length workforces. For example, during times of economic headwinds employers could choose to lean on a more agile temporary staffing model or invest in overdue long-term strategies for developing permanent talent with the aim of making firms both more resilient now and in the future.
Why is job stability important?
Job stability is fundamental for economic health, ensuring steady consumer spending, which further drives demand and supports business growth. It promotes business confidence, supporting expansion and innovation. Overall, job stability strengthens societal well-being, fosters long-term financial security and underpins sustained economic growth and resilience. On an individual level, when employees feel secure in their job and confident in their career progression going forward, this also helps create a healthy and robust labour market.
How is high jobs confidence linked to inflation and the wage-price spiral?
In a skills short, tight labour market, high jobs confidence indicates that workers know their value and their worth, giving them more bargaining power when negotiating a pay rise in a current or a new role. This could essentially lead to a wage-price spiral if rising wages drive costs higher, fuelling inflation. Central banks monitor such dynamics to balance economic growth and inflation control.
What does the Jobs Confidence Index mean for employees and job seekers?
Finding purpose and fulfilment with meaningful work, whilst feeling connected and empowered, should be everyone’s right. Today’s workforce mentality has significantly evolved to a place where individuals no longer simply perceive their workplace as a means of earning a living, but as an environment of shared values, beliefs and purpose. This makes job-seeking and career-building an increasingly personal experience. However, the biggest challenges and opportunities come from sources outside one’s immediate control, such as the state of the macroeconomic environment. The purpose of the Robert Half Jobs Confidence Index is to help individuals better navigate these challenges. Keeping a finger on the pulse of current trends, employees and job seekers can make better informed decisions on how their goals on remuneration, work model and flexibility, as well as skills and progression, fit within the wider picture.
While traditional measures of labour market health, like unemployment and job vacancies, are valuable, the figures alone are not enough to understand the UK’s complex labour market, that's why we have partnered with Cebr to create the quarterly Robert Half Jobs Confidence Index (JCI). The Robert Half JCI provides a holistic view of the labour market with all the stats in one place. The index is uniquely comprised of four pillars:
- The first pillar is job security. This pillar is driven by the UK unemployment rate, the ratio of vacancies to unemployment, the degree of temporary work, and the self-reported confidence of employees with regard to their job security.
- The second pillar, pay confidence, takes the temperature of the outlook for remuneration. This captures the rate of real (inflation adjusted) wage growth alongside growth in productivity, which enables long-run wage growth. The pillar also draws on data on the average variance in pay and the share of workers with variable take-home pay.
- The third pillar, job search and progression confidence, captures a measure of underemployment (involuntary part-time work) and the educational background of workers in the two highest socioeconomic levels. In addition, it is driven by the self-reported confidence of employees regarding their longer term career and progression prospects and the rate of non-student economic inactivity.
- The fourth pillar, macroeconomic confidence, takes a broader look at confidence across the economy. This draws from two CEBR-compiled confidence indices from the perspective of both households (consumers) and businesses.
This report has been produced by Cebr, an independent economics and business research consultancy established in 1992.
Each of the JCI’s 14 indicators is standardised to a normal distribution, using the back history for each. This centres variables around their historical mean and assigns scores based on their standard deviation difference from this mean.
After assigning a positive and negative direction for each variable, the scores are scaled by 100 and pillar scores are determined by the average of the respective sub-indicators. This typically provides pillar scores that vary between -100 and +100, though it is possible for scores to fall outside this range.
A pillar score of greater than zero implies a historically positive degree of economic health from the particular perspective that the indicator measures.
The four pillars are then weighted equally to arrive at a final JCI index score, which also tends to vary between -100 and +100.
