UK businesses are showing strong hiring intentions as the CIPD has today released new data from their Labour Market Outlook report in partnership with the Adecco Group.
As the UK economy comes closer to its reported unemployment peak, the review reveals over half (56%) of UK firms are planning to recruit.
The report measures the number of employers expecting to cut jobs with those planning to add them, revealing the highest employment intentions there has been for a year, the CIPD announced.
The survey involving 2,000 UK employers shows strong hiring intentions in healthcare (80%), finance and insurance (65%), education (65%) and information and communications at 67%. With other harder hit sectors like hospitality, with much lower plans at 36%.
Redundancies have also dropped to 20% from 30% in the previous quarter.
The private sector, in particular, is more willing to maintain their workforce, with the number of planned redundancies dropping from 34% to 20%, with around a quarter of hospitality businesses indicating they were prepared to reduce their headcount even further.
A combination of factors may be the reasoning for this increased hiring confidence, including the Brexit free trade agreement and the extension of the furlough scheme set to finish at the end of April.
Although these are encouraging signs for the labour market, ongoing uncertainty around government support and future restrictions could present further challenges.
Gerwyn Davies, the Senior Labour Market Adviser at the CIPD, said: “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 the 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.”
Alex Fleming, Region President of Northern Europe, Adecco Workforce Solutions, adds:
“The start of 2021 has been challenging, with the UK entering into its third lockdown.
“It is still positive to see some signs of labour market recovery, with a clear rise in net employment intentions.
“The furlough scheme and redeployment have enabled many organisations to avoid redundancies during the pandemic, and as we continue to transition into the new era of work, government support will remain a key factor in helping to minimise any further jobs fallout.
“Investing in reskilling and upskilling will also remain an important tactic in future-proofing the workforce.
“Even with a Brexit deal and the vaccine rollout underway, there is uncertainty, particularly among the younger generation, when it comes to remaining in the UK for work.
“Therefore, companies that invest in career development, enhancing the skillsets of employees and maintaining a positive workplace culture will help to strengthen their talent attraction and retention strategies during what remains such an unprecedented time.”
Take a look at the full CIPD/Adecco Labour Market Outlook Report here.
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