Understanding the economy and labour market
This factsheet was last updated in November 2013.
Why understanding the economy matters for HR
Economic conditions provide the background to the everyday business of HR. What happens in the macro economy, or in individual product markets, ultimately determines how many staff organisations need to recruit, retain and develop in order to meet customer demand. Organisations in turn buy the staff they need in the labour market – how many staff they are able to buy, and at what cost, depending mainly on how many people are available and willing to work.
It is therefore important for organisations to keep a weather eye on likely developments in the economy, with HR practitioners monitoring the state of the labour market in particular. The tools available to do this come in the form of official statistics - mostly published by the Office for National Statistics (ONS) - or evidence drawn from independent surveys. Most official statistics indicate how the economy has been doing. Independent surveys, such as those by the Confederation of British Industry, British Chambers of Commerce and the CIPD, also provide an indication of what lies ahead. The CIPD, for example, conducts a quarterly Labour Market Outlook survey. The published results supplement official statistics with the latest experience and expectations of up to 2000 CIPD members.
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- Why understanding the economy matters for HR
- Measuring the economy
- The economic cycle
- Human resources in the labour market
- CIPD viewpoint
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