There can be little doubt that when it comes to the UK’s economic outlook, optimism is currently the flavour of the day. On the employment front in particular, things could hardly look more rosy. Or could they?
Let’s start with the good news. The latest Labour Market Outlook from the Chartered Institute of Personnel and Development (CIPD) reveals that employment intentions among its members are at their highest level in over six years. In fact, the net employment balance has increased by 10 points, from +16 to +26, since winter 2013/14. Yet, whilst the recovery of the UK jobs market is not having a detrimental affect on employers’ ability to recruit in the short-term, difficulties remain when it comes to filling high-skilled vacancies. Two in five employers report that they currently have vacancies that are hard to fill – which is consistent with previous Labour Market Outlook surveys – with engineering positions proving the hardest to fill. These are followed closely by management and executive roles, with lack of technical or job-specific skills cited as the most common reasons for the difficulties in filling such roles.
Concern is also rife on the pay front. In spite of the positive hiring intentions of businesses, median pay expectations, excluding bonuses, remain unchanged at 2%.
The CIPD believes the answer to these two headaches should be delivered by employers themselves. “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,” said Gerwyn Davies, labour market adviser at the CIPD. “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.”
But it’s far from being doom and gloom. The report went on to find that more organisations plan to invest in their talent pipeline than in previous years. Around three in ten (31%) employers that currently have hard to fill vacancies intend to hire more UK graduates, around one in five (22%) plan to hire more apprentices and half (50%) of employers are planning to up-skill existing staff in the next two years. And here’s what got us really excited: SMEs are significantly more positive about their employment prospects (+52) than larger employers (+11). We reported recently how the ‘vital 99%’ is fuelling a recruitment surge, and long may that continue.
For now though, it’s all about training, training, training. And a bit more training.