After a turbulent 2016, the next 12 months are set to prove even more challenging for the UK Government and businesses as the key issues of Brexit, the gig economy, pay and productivity will continue to dominate the labour market, according to the CIPD, the professional body for HR and people development
In the CIPD’s annual labour market predictions, Ian Brinkley, acting chief economist, anticipates slower economic growth, a modest rise in unemployment, fewer new jobs and downward pressure on pay, as the UK continues to suffer from low productivity and continued uncertainty about its Brexit arrangement.
Commenting on 2016 Ian Brinkley said:
On the UK labour market:
Brinkley’s prognosis for UK labour market in 2017 is fairly bleak; with slower economic growth, increased unemployment, fewer new jobs and a lack of pay rises for most. Overall, employment stopped growing between May-October 2016 and this trend of very weak job growth is expected to continue into 2017. He also predicts a modest increase in unemployment with fewer new jobs – possibly as few as 100,000 – being created throughout the year. It’s also expected that 2017 could be the year when inward migration to the UK from the rest of the EU starts to move towards permanently lower levels. There was a sharp slowdown in inward migration between July-September according to the Office of National Statistics. The CIPD’s latest Labour Market Outlook (Nov 2016) also found that almost four-in-ten (38%) of employers think it will be harder to recruit EU workers in the year ahead and 28% have concerns that their current migrant workers may wish to leave the UK.
On pay:
Against a backdrop of anticipated higher inflation, real wages are set to fall in the next 12 months. Most employers are also likely to find that they are either unable to or don’t need to offer higher wages, making 2017 a year of no real terms pay rises for most people. The CIPD’s latest Labour Market Outlook (November 2016) saw employers expect median basic pay settlements of just 1.1% for the 12 months ahead.
On the gig economy and working practices:
By international standards, the UK has a high share of permanent work and a high share of good quality jobs, but 2016 was marred by stories of poor employment practices, particularly amongst certain high street retailers and employers engaged in the gig economy, with the use of agency workers and the employment status and rights of people involved in different forms of atypical working coming under the spotlight.
Brinkley comments:
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