Business prospects 'waning' in UK due to Brexit - analyst

Employee confidence in UK business environment declines for third consecutive quarter, reports Gartner

The uncertainty around Brexit and what form it takes may trigger a recession, according to Gartner.

The "unprecedented" economic and political uncertainty in the second quarter of 2019 saw employee confidence in the business environment continue to decline, dropping over six per cent from an index score of 47.6 in the first quarter to 44.6 in Q2, the analyst reported.

Gartner attributed this confidence ebb to the extension of the Brexit deadline from its original 31 March date, as well as Boris Johnson's appointment as prime minister, both of which occurred in the second quarter of this year.

Employee confidence has dropped 15.5 percentage points on the international index since Q3 of 2018. UK workers' confidence in near-term business conditions is seven percentage points below the international index average at 44.6 per cent, while their confidence in long-term economic prospects sits at 51.6 per cent.

"With all the economic uncertainty surrounding Brexit, a previously vibrant UK labour market now seems to be running out of gas," said Brian Kropp, chief of research for the Gartner HR practice.

"Opportunities, rewards, and bright business prospects are perceived to be waning. Historically, these sorts of shifts precede a recession, and coupled with the headwinds of a US-China trade war, a global decline may be in the future."

Active job seeking from employees has also decreased by almost eight per cent, while their intent to stay with their current organisations has increased by 11.4 per cent.

"In the face of a job market that looks increasingly stormy, UK employees are seeking to "hunker down" in their current roles," the analyst stated.

However, although intent to stay has increased, passive job-seeking has seen a strong and continued rise since the third quarter of last year.

Nearly 60 per cent of the UK workforce reported that they were passively looking for other employment in Q2 2019 - 10 per cent more than the global average. This indicates that worker loyalty might not reflect their intention to stay with their current employer.

The reasons given by those in the UK for leaving an organisation also differ from their global counterparts.

They ranked people management as the top reason for leaving their previous employer, with work-life balance and manager quality ranked second and third, respectively.

Compensation, future career opportunity and people management were the top three reasons, respectively, cited by workers globally for departing an organisation.

Gartner reported that UK workers are more concerned with the less-tangible benefits employers offer that affect their overall quality of life.

"Understanding what your employees value most enables organisations to tailor their employee value proposition (EVP) to promote those specific job attributes that will most appeal to candidates," said Kropp.

"This can bolster recruiting efforts as Gartner research shows that when candidates view an EVP as attractive, employers can reach 50 per cent deeper into the labour market."