UK quarterly hiring outlook remains strong

Strong hiring in the UK is set to continue as private-sector pay awards reach new highs, according to the Labour Market Outlook.

For now, hiring in the UK remains strong, and pay awards are continuing to rise across public and private sectors as some employers struggle to fill roles. But the strong labour market could soon reach its peak, according to the summer 2022 CIPD Labour Market Outlook.

This latest quarterly report from the Chartered Institute of Personnel and Development (CIPD) was based on an online survey of more than 2,000 senior human resources professionals and decision-makers in the UK in June and July.

Expected pay awards in the private sector have risen to a median of 4% — the highest increase since 2012. Across the private, public, and third/voluntary sectors, employers expect median basic pay raises to remain at 3% — as they have for the past three quarters.

But strong pay awards can't last, nor the hiring boom, according to Jonathan Boys, labour market economist for the CIPD.

"Forecasts of a recession may dampen employers' recruitment plans in time, but for now, the UK is still in the grips of a hiring boom, with nearly three in four employers planning to take on more staff," Boys said in a news release.

Here are some other key takeaways from the report:

Upskilling is the most popular response to hiring difficulties. About 41% of employers are using upskilling of existing staff to combat recruitment and retention difficulties, followed by advertising more jobs as being flexible (35%) and raising wages (29%).

Almost half of employers have hard-to-fill vacancies. These vacancies are most common in education (56%), transport and storage (55%), and the voluntary sector (53%), followed by administrative and support service activities, and information and communication.

Employment confidence remains high. The net employment balance — which measures the difference between employers expecting to increase staff levels and those expecting to decrease staff levels in the next three months — remained high at +34. This is down two points from the spring report, but it continues to exceed pre-pandemic levels. The number of employers who intend to add staff this quarter has nearly doubled compared with the summer of 2020, when the COVID-19 pandemic disrupted organisations of all types.

Redundancies remain low. Redundancy plans have been low for six consecutive quarters after peaking during the pandemic. Only 13% of employers are planning to make redundancies in the next three months, according to the outlook. This is further evidence that, in a tight labour market, employers are focusing on keeping their existing staff, the CIPD said.

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