Insider Media Limited

Companies in the Midlands are largely optimistic about increasing headcounts next year, according to human resources experts at PwC. However, the advisory firm warns that skills shortages in the region “could create challenges”.

A new PwC survey has revealed that more than a quarter (28 per cent) of UK businesses expect to increase their headcount next year. Fifteen per cent of these companies say the increases will be “significant”.

The picture is similar in the US and much of Europe, according to a PwC survey of HR directors in 1,100 companies across Europe and the US, including 589 organisations with more than 1,000 employees.

The number of British businesses expecting to create new jobs has more than doubled since last year's survey, when just 13 per cent of companies planned to make increases. Conversely, the number planning cuts has shrunk from 43 per cent in 2009 to just 16 per cent this year.

Robert Wigley-Jones, human resource services partner at PwC in the Midlands, said: “The expected headcount increases are encouraging news for the Midlands job market and suggest the private sector will be able to accommodate those public sector workers who are made redundant. While 13 per cent of firms nationally say the new jobs will be making up for reductions made during the downtown, 15 per cent plan significant increases over and above this point. This shows a confidence that economic growth will continue.

"For organisations to meet their headcount targets, retaining employees will be just as important as finding new hires. The loyalty of many workers will have been severely tested during the last two years, and will be challenged further as the job market picks up.

"Identifying how best to reward and motivate these individuals should be the top priority, and will remain challenging, given pay constraints in many businesses.”