New economic research by executive recruitment company Archer Mathieson reveals that senior business professionals fear a challenging and competitive labour market may prevent them meeting their staff needs in the next 12 months.

The survey of 200 finance, HR and IT professionals found that while employment figures currently stand at the highest level in history, 65% of respondents say they expect to face a shortage in candidates over the next 12 months. This is compounded by a pressure to reduce labour costs felt by almost 80% of respondents.

Many anticipate a need for greater flexibility and creativity in filling vacancies and rewarding their teams, while 90% said they would consider employing interim specialists, and almost as many favour the use of alternative forms of remuneration beyond basic salaries.

Ashton Ward, senior partner of Archer Mathieson, said the survey findings confirm that firms face steep competition to lure high-quality candidates.

“We are seeing an on-going battle in the fight for talent, and knowing your market is becoming increasingly important in the role of the modern-day recruiter,”

The survey also found that consumer spending topped the rankings as the most important indicator of economic outlook, followed by interest rates and gross domestic product (GDP). Businesses involved in the fast-moving consumer goods (FMCG) and retail sectors were the most likely to rank consumer spending at the top, while the pharmaceutical and technology sectors were more likely to use interest rates as an indicator.

A solid 70% of the sample considered their industry sector to be stable, especially in business services. However, approximately half of FMCG and retail respondents believed their sector to be in a volatile period.

The firm compiled its Economic Survey 2007 in conjunction with Dennis Turner, chief economist of HSBC Bank.

The full survey is available to download here.