Labour Market Outlook – Spring 2022
Basic pay awards remain at historic high as employers keep focus on recruitment and retention challenges

The quarterly Labour Market Outlook 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.
Labour Market Outlook: Spring 2022
Recruitment intentions are above pre-pandemic levels and appear to be on an upward trajectory. Almost three-quarters (74%) of employers say they are planning to take on new staff in the next three months. But as expected, recruitment difficulties remain, with 45% saying they have hard-to-fill vacancies.
The most popular response to hiring difficulties has been to raise pay (44%). But employers may be reaching a limit on how much further they can go on pay: only 27% anticipate raising pay in future to address hard-to-fill vacancies. Encouragingly, employers are also looking to other means to tackle staffing challenges: 39% have focused on upskilling more existing staff and 38% have advertised more jobs as flexible. These are vital factors in improving job quality and will be increasingly important for employers as they wrestle with recruitment as well as retention.
Download the full report:
Summary

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 +36, after reaching +37 last quarter. This continues to exceed pre-pandemic levels, pointing to strong employment intentions.

Raising pay the most popular response to hiring difficulties
Employers have responded to recruitment challenges by raising pay (44%), upskilling existing staff (39%) and advertising more jobs as flexible (38%). However, employers may have reached a limit to how much further they can go on pay: only 27% anticipate raising pay to address recruitment challenges in the next six months.

Hard-to-fill vacancies prevalent and persistent
Forty-five per cent of employers have hard-to-fill vacancies. These are most common in healthcare (54%), the voluntary sector (49%) and education (49%).

Redundancies remain below pre-pandemic level
Relative to historical levels, redundancy intentions among employers remain low at 13%. This figure stood at 33% in summer 2020 and 16% prior to the pandemic.

Pay rises lag behind inflation
In a continuation of the trend seen last quarter, employers expect median basic pay awards to stay at 3%. This is the highest recorded since this report started in its current form in winter 2012/13. Despite this, it is still expected to be outpaced by forecast increases to inflation.
Access the LMO quarterly surveys
PDFs to previous reports can be found below. CIPD members can access earlier reports via the HR and L&D archive database.
Explore our related content
Employee financial wellbeing
As the cost of living continues to rise, employers have a more important role to play than ever before in supporting their employee's financial wellbeing
Recruitment and induction
Guidance on good-practice recruitment and induction processes, from work placements and internships to internal recruitment and secondments
Resourcing and talent planning survey
Our trend analysis and benchmarking data on recruitment, workforce planning and retention will help HR and employers map their pandemic recovery
CIPD Good Work Index
The CIPD Good Work Index provides an annual snapshot of job quality in the UK, giving insight to drive improvement to working lives