Businesses are calling for close cooperation with ministers to prevent unsettling employers during the most significant reform of workers’ rights in decades, according to a prominent recruitment trade organization.

Neil Carberry, CEO of the Recruitment & Employment Confederation (REC), commented, “The government’s focus on economic growth is appropriate. Only growth can convert employers’ intentions to hire and invest into concrete actions.

Creating favorable conditions for diverse working arrangements that meet both workers’ and the economy’s needs is crucial. The government’s ‘make work pay’ initiative must be carefully handled to avoid discouraging temporary work opportunities.

Any uncertainty about new employment rules or their impact should be clarified by involving businesses in the rule-making process.”

Business leaders caution that the government risks causing significant economic harm if it rapidly advances new legislation under the proposed Employment Rights Bill.

The Federation of Small Businesses has previously warned that measures like banning exploitative zero-hours contracts and granting unfair dismissal protection and sick pay immediately after probation could increase the burden on companies already facing high inflation and interest rates.

This warning follows recent data from the Labour Market Tracker, released by the confederation and Lightcast, indicating a slowdown in job vacancies last month. July saw 748,211 new job postings, a 3.2 percent drop from June.

• Businesses Advise Labour to Slow Down Workers’ Rights Reforms

Despite the decline, the total number of vacancies remains historically high, driven by skill shortages in certain sectors and growth in industries like construction, finance, and retail, which are economic indicators.

Carberry noted that the data indicates growing optimism for the year’s end, with economic growth strengthening, interest rate reductions, and significantly lower inflation compared to the previous year. Feedback from confederation members also indicated that increased business activity and the completion of the general election had facilitated some hiring decisions.

“The high number and wide distribution of vacancies in today’s report is especially beneficial for recent graduates and school leavers who are aiming to start their careers this summer, as well as for those re-entering the job market after a break.”

For the second consecutive month, job postings for childminders saw the largest increase, doubling from June to July 2024. About 27,500 early-years professionals will be needed to meet the anticipated rise in demand for places, an 8 percent expansion of the current workforce, according to estimates by the think tank Nesta.

Job opportunities for train and tram drivers also surged, while postings for primary teachers and pharmacy assistants decreased by around 10 percent.