Labour Market Outlook Spring 2024: Key Insights for Employers

Labour Market Outlook Spring 2024: Key Insights for Employers | IE-UK
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The latest Labour Market Outlook report from the Chartered Institute of Personnel and Development (CIPD) provides valuable insights into the current state of the UK labour market.

This report, based on a survey of over 2,000 employers, highlights significant trends and offers guidance on navigating the evolving employment landscape. Here’s a summary of the key findings and the CIPD’s recommendations for staying ahead of the curve.

Employment trends: stability amidst change

The net employment balance, which measures the difference between employers expecting to increase staff levels and those expecting to decrease them remains positive. In fact, figures show we have been back to pre-pandemic levels for the last year.

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However, while it is positive that more employers still plan to hire than to reduce staff, the decline from +22 to +19 suggests a slight slowdown in recruitment plans.

Most companies plan to maintain current staff levels

That said, over half of the employers questioned (55%) plan to maintain their current staff levels, the highest proportion since winter 2016/17​​.

Recruitment and redundancy outlook

Two-thirds of employers plan to recruit in the next three months, with recruitment intentions highest in the public sector (82%) and the voluntary sector (72%)​​. However, 19% of employers are also planning redundancies in the same period.

This dual trend of recruitment alongside planned redundancies indicates a shifting labour market where employers are actively seeking to fill critical roles while also managing workforce reductions.

Hard-to-fill vacancies and pay outlook

A significant 37% of employers report hard-to-fill vacancies, with the public sector particularly affected (52%). In education, nearly three in five employers face hard-to-fill vacancies, exacerbated by issues such as high workload and teacher shortages​​.

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Expected pay increases remain stable at 4% in the private sector and 3% in the public sector. This gap may pose challenges in retaining public sector staff, as the private sector continues to offer higher pay​​.

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What does the CIPD suggest employers do?

Look at recruitment approaches

To address hard-to-fill vacancies, the CIPD suggest broadening your talent pool through inclusive recruitment practices and improved employee experience.

The CIPD specifically suggests highlighting your company’s commitment to fair and transparent employment policies as well as sustainable working practices. In this way, you will reassure potential recruits about the quality of leadership on issues that are important to them.

As demographic shifts see the ascent of Millennials and Gen Z into senior management roles, companies ignore their new priorities at their peril.

You can read more here about the increasing importance of ESG in attracting and retaining talent.

Improve job quality

The CIPD also say addressing hard-to-fill vacancies will inevitably require improving job quality. This might involve enhancing working conditions, providing opportunities for professional development, and ensuring a supportive and inclusive workplace culture.

Focus on retention

With the risk of losing high-quality staff members highlighted in the CIPD report, it's worth considering how we can make our workplaces more centred around those we value.

Many commentators are saying the era of The Great Resignation is over - and we are experiencing ‘The Great Stay’ instead.  This is partly due to a lack of confidence in the job market, but many see it as a result of changes made to working practices in reaction to the post-Covid job exodus.

According to specialist independent consultancy Barnett Waddingham as much as 84% of businesses shifted to hybrid working as a means of retaining staff, post-Covid.

But cultural factors beyond hybrid working opportunities have been found to have the most positive impact on employees’ motivation to stay within a company - while attracting others to join.

Focus on your Employee Value Proposition

Developing a ‘human centric’ workplace has been said to increase employee satisfaction by as much as 15%.

Beyond robust benefits packages, the way organisations actively value staff through holistic well-being initiatives and investing in team dynamics can make a huge difference to workers’ sense of belonging and focus.

“Building a strong sense of purpose for your company should involve shaping your workplaces as ‘destinations’ where hybrid and office workers can congregate to bond and exchange ideas — a place where teams can find a physical embodiment of your company’s culture and values.”

Conclusion

The Labour Market Outlook Spring 2024 report underscores the need for employers to adapt to a rapidly changing labour market. By focusing on strategic recruitment, retention, and support for employee wellbeing, organisations can navigate the challenges and leverage opportunities for growth.

The Destination Office

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