CIPD: Employment intentions reach six and a half year high but are yet to feed through to pay intentions
12 May 2014 10:44 AM
Employment intentions
reach six and a half year high but are yet to feed through to pay
intentions
Recruitment difficulties are
not yet widespread but the CIPD urges employers to invest in their workforce
now to offset future skills shortages
The CIPD's latest quarterly
Labour Market Outlook has found that employment intentions are at
their highest level for six and a half years, but pay remains
subdued.
The report finds little evidence
that the buoyant jobs market is feeding through into recruitment difficulties
for the majority of employers in the short term, but some sectors are
struggling to fill high-skilled vacancies. The CIPD is therefore urging
employers in all sectors to start planning ahead to mitigate the risk of
widespread skills shortages in the longer term.
The Spring 2014 Labour Market
Outlook net employment balance* has increased to +26 from +16 since the Winter
2013/14 report. This is the highest score since autumn 2007. Meanwhile,
median pay expectations, excluding bonuses, are unchanged at
2%.
Just two in five employers
report that they currently have vacancies that are hard to fill, which is
broadly consistent with previous Labour Market Outlook surveys. Recruitment
difficulties are higher in the public sector than in the private sector and
employers report that the majority of vacancies they find hard to fill are
highly skilled or skilled (71%). Engineering roles are the hardest to fill,
followed closely by management and executive roles, and the most common reason
for difficulties filling vacancies is a lack of technical or job specific
skills.
Encouragingly, more
organisations plan to invest in their talent pipeline than in previous years,
with around three in ten (31%) employers that currently have hard to fill
vacancies intending to hire more UK graduates, around one in five (22%)
planning to hire more apprentices and half (50%) of such employers planning to
up-skill existing staff in the next two years. The report concludes that
employers need to ensure that they deliver on these intentions to invest in
their talent pipeline in order to help offset future skills
shortages.
Gerwyn Davies, labour
market adviser at the CIPD, comments:
"The UK jobs market looks
set to continue its remarkable post-recession performance. However, while
skills shortages are still relatively concentrated in particular sectors and
occupations in the domestic labour market, and pay continues to perform well
below pre-recession levels, there is a danger that this may change if the
labour market continues to tighten.
"Against the backdrop of
the prediction of strong employment growth, now is the time for employers to
ensure that any future plans to increase business investment prioritises
investment in training. This will not only help stave off the threat of
recruitment difficulties increasing sharply in the future, but also help to
boost productivity levels that we know are essential to the nation's
overall economic performance and therefore pay
prospects."
Davies continues,
"Employers have all too often blamed government policy for skills
shortages, when they often have more control and power over the future needs of
their workforce. It's therefore encouraging to see so many employers
planning to invest in their workforce now, rather than risk paying a premium
for talent when the economy picks up further and skills shortages begin to
spread. But investing in your workforce is not all about recruitment -
employers should also be thinking about how they design job roles that will
meet the changing needs of the business and up-skill existing staff to fill
those roles. Where new recruits are needed, employers would benefit from
working more closely with education providers to ensure that school leavers,
apprentices and graduates entering the labour market have the skills and
capabilities businesses need."
Davies concludes,
"Employers have perhaps too often conflated recruitment difficulties with
skills shortages and ignored some of the other key reasons behind their
recruitment difficulties. Employers would therefore also do well to look at the
pay and employment conditions they offer, as well as the organisation's
brand and reputation, as this may also affect applicant numbers, which is
reported to be another key reason for recruitment
difficulties".
Other findings
include:
- Private sector firms are driving
much of the predicted upturn in employment prospects, with the net employment
balance improving to +37 from +27
- SME employers are significantly
more positive about their employment prospects than large employers (net
employment of +52 for SMEs compared with +11 for large
employers)
- Recruitment intentions are
strongest in the following sectors:
- education (77% of employers plan
to recruit)
- human health and social work
(72%)
- financial, insurance activities
and real estate (70%)
- information and communications
(70%)
- Expected median basic
pay increases (excluding bonuses) for those employers planning a pay review
remains at 2% in the private sector (as per last quarter) and 1% in the public
sector. The expected mean basic pay increase (also excluding bonuses)
decreased to 1.5%.
* The Labour Market Outlook
net employment balance measures the difference between the proportion of
employers who expect to increase staff levels over those who expect to decrease
staff levels in the second quarter of 2014
CIPD Press
Enquiries
Robert Blevin / Katy Askew /
Isabel Allanwood
Tel: 020 8612
6400
Email: press@cipd.co.uk
Notes to
Editors
The CIPD is the professional
body for HR and people development. It has over 130,000 members internationally
working in HR, learning and development, people management and consulting
across private businesses and organisations in the public and voluntary
sectors. As an independent and not for profit organisation, the CIPD is
committed to championing better work and working lives for the benefit of
individuals, business, the economy and wider society - because good work and
all it entails is good for business and society at large, and what is good for
business should also be good for people's working lives. The CIPD brings
together extensive research and thought leadership, practical advice and
guidance, professional development and rigorous professional standards to drive
better capabilities and understanding in how organisations of all kinds operate
and perform, and in how they manage and develop their people. A Royal Charter
enables the CIPD to confer individual chartered status on members who meet the
required standards of knowledge, practice and behaviours.