Brexit, gig economy and pay will define labour market in 2017, says CIPD

Brexit, gig economy and pay will define labour market in 2017, says CIPD

 

Issues such as Brexit, the gig economy, pay and productivity will continue to dominate the UK labour market throughout 2017, according to the Chartered Institute of Personnel and Development (CIPD).

In the CIPD’s annual labour market predictions, acting chief economist Ian Brinkley forecast slower economic growth, a modest rise in unemployment, fewer new jobs and downward pressure on pay, as the UK continues to suffer from low productivity and continued Brexit uncertainty.

When it comes to pay, Brinkley suggested real wages will fall over the next 12 months against a backdrop of anticipated higher inflation. In addition, most employers are likely to find they are either unable to or don’t need to offer higher wages, making 2017 a year of no real-terms pay rises for most people.

The CIPD’s forecast also highlighted how 2016 saw stories of poor employment practices, particularly among certain high street retailers and employers engaged in the gig economy, with the use of agency workers and the employment status and rights of people involved in different forms of atypical working coming under the spotlight.

Brinkley said: “While the gig economy works for many people we know that, for significant minorities, the experience of work is poor and getting worse. The publication of the independent review into employment practices led by Matthew Taylor will be the first real test of the new Government‘s appetite to regulate new forms of employment and ensure that flexible working works for all and that, where needed, employers make concessions on pay, hours and conditions.

“However, we expect the trend of flexible or ‘atypical’ employment practices – through agency work, zero hours and self-employment – to continue. How to manage, train and progress an increasingly arms-length part of the workforce will remain a major and growing challenge for organisations and the HR profession in particular.”

The CIPD also welcomed the Government’s revamped productivity plan, backed by £23 billion of public investment, but called for it to be more strongly focused on skills development in order to boost productivity.

Brinkley added: “Once again in 2016, UK productivity has failed to turn a corner but we should expect a better year in 2017, thanks to investments announced in the Autumn Statement. The National Productivity Investment Fund is a step in the right direction but it contained no specific measures to boost workforce skills and development. At a time when the supply of migrant workers coming into the UK from the EU is likely to be restricted it’s a massive oversight to not take the necessary steps to invest in developing the skills of the UK workforce. This is a major omission, given the strong link between skills and productivity. Diverting just five per cent of the fund towards skills development would provide over £1 billion in additional investment over the next four years.

“Equally, the Government’s new industrial strategy for 2017 should focus much more strongly on the workplace and skills, with the single aim of improving productivity. 2017 provides a chance to break from the old narrow focus on a handful of high tech and export sectors that has achieved little to date. Our economy is broad; investment in productivity must be too.

“Until we crack the UK’s productivity problem, and find ways to sustain productivity growth, it’s unlikely that we will see any improvement to living standards for some time.”

Tuesday, 3 January 2017

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