CIPD: “Employment growth continues as employers face increasing challenges”

 

CIPD and The Adecco Group’s latest Labour Market Outlook report shows a tightening labour market as pay edges upwards and employers’ near term employment expectations rise to a 5 year high.

The continued growth in demand for labour highlights employer confidence while the tightening market makes it much harder to secure the skills and experience they need.

Meanwhile, median basic pay expectations for the coming year remain at 2%, and mean basic pay expectations have risen from 1.8% to 2.1% over the last quarter, there are signs that wage pressures may be increasing.

The joint quarterly survey polled 1,000 employers and suggests strong demand for labour in the second quarter of 2018.

In the last quarter, the net employment balance, the measure of the difference between the proportion of employers who expect to recruit and those who expect to decrease staff levels, increased from +16 to +26.

The survey suggests that employers are buoyed by news that the UK’s existing trading arrangements and freedom of movement, including arriving EU nationals being able to stay in the UK indefinitely,  will continue throughout the Brexit transition period to December 2020. This confidence is boosted by continued strengthening of the global economy in sectors such as manufacturing and business services, boosted by a depreciation of the pound.

However, the number of vacancies across the UK remains high above average levels.

The CIPD’s warning that employers’ demands for skills may outstrip supply is backed up by the almost two thirds of employers in the survey who say that some of their vacancies are proving hard to fill.

56% reported that they were experiencing the same difficulties in the same period in 2017, with 28% responding to the issues by raising wages.

Gerwyn Davies, senior labour market analyst for the CIPD, said “Employers need to think more creatively about their workforce planning and talent pipelines to ensure that they can continue to access and develop key skills. There needs to be a mix of attracting new and diverse talent as well as up-skilling existing staff.  In particular, organisations must put much more effort into attracting and retaining older workers, women returning to work after having children and other disadvantaged groups in the labour market, as well as investing in training and developing their existing workers.”

Alex Fleming, Country Head of UK and Ireland and President of Staffing and Solutions, The Adecco Group UK and Ireland, added “Employers have more than one weapon in their arsenal; elements such as flexible working, modern workspaces, collaborative office spaces and inspiring management are all attractive to different segments of the labour market. It is time for employers to recognise talent as individuals and tailor employment packages accordingly to avoid missing out on key skills which will drive innovation and success.” 

Thursday, 17 May 2018

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CIPD: “Employment growth continues as employers face increasing challenges”