The quarterly Labour Market Outlook, produced in partnership with the The Adecco Group UK & Ireland is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions.
About The Adecco Group UK and Ireland
The Adecco Group UK&I and its brands are part of the Adecco Group, the world’s leading HR solutions partner. As a Group, we provide more than 700,000 people with permanent and flexible employment every day. With more than 34,000 employees in 60 countries – 3,100 in the UK&I – we transform the world of work one job at a time. Our colleagues serve more than 100,000 organisations with the talent, HR services and cutting-edge technology they need to succeed in an ever-changing global economy. As a Fortune Global 500 company, we lead by example, creating shared value that meets social needs while driving business innovation. Our culture of inclusivity, fairness and teamwork empowers individuals and organisations, fuels economies, and builds better societies. These values resonate with our employees, who voted us number 5 on the Great Place to Work® - World’s Best Workplaces 2018 list. We make the future work for everyone.
The Adecco Group is based in Zurich, Switzerland. Adecco Group AG is registered in Switzerland (ISIN: CH0012138605) and listed on the SIX Swiss Exchange (ADEN). The Group is powered by nine lead brands: Adecco, Modis, Badenoch & Clark, Spring Professional, Lee Hecht Harrison, Pontoon, Adia, General Assembly and YOSS.
The Adecco Group UK&I’s head office is located in London, UK. We have 11 brands, including the Adecco Group UK&I, Adecco, Adia, Ajilon, Badenoch & Clark, Modis, Office Angels, Penna, Pontoon, Roevin and Spring.
Labour Market Outlook: Spring 2019
At least in the short term, this quarter’s findings reveal that recent employment confidence is set to continue. Businesses within most industries appear to have shrugged off any Brexit related uncertainty, with the majority of LMO employers still intending to increase staff levels.
Given demand for labour remains buoyant, it isn’t surprising that over two-fifths of employer’s report that it has become more difficult to fill vacancies during the last year, and around a third stated that it has become harder to retain staff.
Interestingly, continuing employment confidence hasn’t extended to pay. In line with previous LMO reports, basic pay expectations among both private and public sector employers for the next 12 months remain stagnant. Notably, this excludes key staff and new starters, who are more likely to have seen an increase in pay due to the continuing recruitment and retention difficulties felt by employers.
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This quarter’s net employment balance, or the difference between the proportion of employers who expect to increase or decrease staff levels, has increased two points to +22 since last quarter. This demonstrates a high degree of employment confidence and is broadly consistent with recent quarters.
Of organisations actively looking to hire new employees, 61% reported that at least one of their current vacancies were proving hard-to-fill. This figure (61%) is identical to the one reported during the same period last year.
Recruitment and retention continue to be major challenges for employers. 41% of employers reported that it’s become harder to fill vacancies during the past year, with 33% also stating that it’s grown more difficult to retain staff members. In response to these challenges, upskilling existing employees to fill hard-to-recruit-for positions remains the most popular option among employers, with 43% reportedly taking this measure. Other popular options include raising wages (29%) and hiring more apprentices to attract staff (23%).
Wages and Salaries
Median basic pay expectations in the 12 months up to March 2020 remain at 2%, which is consistent with previous LMO reports. However, expectations in the private sector fell back from 2.5% to 2% after last quarter’s increase. Public sector basic pay expectations rose from 1% to 1.5%.
The lack of significant growth in pay expectations over previous quarters slightly contradicts the latest ONS statistics, which show that earnings (excluding bonuses) increased by 3.4% over the last year. This is partially explainable by the limitations of basic pay settlements in capturing the extent to which employers are offering increased pay to key or new employees. While many LMO employers reported increasing starting salaries to combat recruitment and retention difficulties, a similar proportion also stated that they have raised salaries for only a minority of vacancies and positions.
Labour Market Outlook archive
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