CIPD report shows encouraging rise in employer recruitment plans

Their latest Labour Market Outlook report, based on responses form 2,000 bosses, suggests UK unemployment could have peaked.

Meanwhile, the percentage of employers saying they are planning to recruit rose to 56% in first quarter of 2021. This shows an increase from 53% in the previous quarter and 49% six months ago, although it remains much lower than the 66% recorded during the same quarter in 2020.

The survey’s net employment intentions figure, which measures the difference between the proportion of employers expecting to add jobs and those planning to cut positions, rose to +11 this quarter. This is its highest in a year and compares starkly to the –1 of the previous quarter. 

Sectors that are indicating strong hiring intentions include healthcare (80%), finance and insurance (65%), education (65%) and information and communications (67%). Sectors affected by the?social distancing measures continue to suffer, notably?hospitality? at 36%. 

And the proportion of organisations planning redundancies in the first quarter fell by a third, from 30% to 20% compared with the last quarter. Interestingly, the picture is most positive in the private sector, with the number of employers saying they are planning redundancies dropping from 34% to 20%.

The report authors cite a number of likely influences including the Brexit free trade agreement, extension of the Job Retention Scheme to the end of April and anticipation of economic recovery. 

CIPD  senior labour market adviser Gerwyn Davies remarked:  

“These are the first signs of positive employment prospects that we've seen in a year. Our findings suggest that unemployment may be close to peak and may even undershoot official forecasts, especially given the reported fall in the supply of overseas workers.

However, it is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme to the end of June or if the economy suffers any additional unexpected shocks. It would be hugely counterproductive if the government’s financial support faltered while some of the biggest sectors of the UK economy are still in survival mode.”