FOUR in ten HR directors in the South-West plan to expand hiring, with their companies set to add new positions, in the first six months of 2015 according to the latest Professional Hiring Index from Robert Half UK.

Two points higher than six months prior, the research highlights that the labour market has firmly shifted into a post-recessionary cycle, where professionals with marketable skills hold the advantage as candidate demand outweighs supply.

The index reveals that just 3% of HR executives believe their company will reduce their overall headcount over the period.

And 8% believe their company will freeze hiring in the next six months, by not filling vacant positions or creating new ones, while half will only fill vacated posts.

Experts say the figures show that the region is firmly positioned for growth in 2015.

Employee retention continues to be a major concern for HR professionals as the labour market heats up, with 75% concerned about losing top performers to other job opportunities, which will put pressure on employers to increase salary and benefits in order to retain them. This is likely to drive broader wage inflation through 2015 and beyond.

Matt Weston, director South-West of Robert Half, said: “Hiring levels are showing signs of surpassing pre-recessionary levels.

“From a recruitment perspective we are finding that companies in the South-West are looking to 2015 as a year to expand their businesses, and one way of doing this is hiring skilled professionals to help with increasing workloads.

“However due to demand outweighing supply and a lack of technical experts, companies are discovering that it is becoming harder to source skilled professionals without external assistance.”

The war for talent is set to increase dramatically in the next 12 months due to an ongoing skills shortage in the labour force - nine in 10 HR professionals say it is a challenging environment to identify skilled professional-level employees for their organisation, with a quarter stating it is very challenging.

A lack of niche technical experts was cited by 36% of HR directors surveyed as the reason they were struggling to recruit appropriate personnel for their organisation.

Increasing competition between employers was a significant factor, with 22% of respondents saying demand was outstripping supply for candidates.

Systemic problems regarding the development of suitable recruits for the job market are still posing a problem for employers.

A quarter of HR professionals believe it is challenging to fill positions because candidates still lack the fundamental commercial and business skills required for their organisation.