More employers are looking to increase headcount than reduce the size of their workforce, but most are planning to maintain their current staff levels.
The CIPD’s spring 2024 labour market outlook, which is based on a survey of more than 2,000 employers, found that 55% wanted to keep headcount as it is over the next three months, the highest proportion since winter 2016/17.
Thirty per cent wanted to increase employee numbers, down from 37% a year ago, while 11% wished to reduce headcount. Nineteen per cent were planning to make redundancies, similar to the proportion who said the same in 2023.
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Public sector employers (19%) are twice as likely as private sector firms (9%) to say they will slash total headcount over the next quarter. Private sector employers (33%) are more likely to increase staff numbers (23% in the public sector).
Its net employment balance – which measures the difference between employers expecting to increase staff levels in the next three months and those expecting to decrease staff levels – has fallen from +22 to +19.
One in five said they had hard-to-fill vacancies. These were most prevalent among employers in education, manufacturing, voluntary sector, and public sector.
Forty-five per cent with hard-to-fill vacancies were focusing on upskilling existing workers, while 30% planned to increase wages.
CIPD labour market economist James Cockett said the so-called “great resignation” seen after the pandemic has been replaced by what he called “the big stay”, with more employees opting to stay in their current roles.
“Based on the trends in our report, there’s likely to be further falls in both turnover and vacancy levels in 2024,” he said. “Employers will need to look forward and factor in this lower attrition when making decisions around staffing levels and the future of their workforce.”
He said it is now important for employers to invest in upskilling existing staff. “Skills are vital to meeting both current and future business demands and employers need to consider what skills need to be developed now, in order to create successful and productive workforces in future,” he said.
The CIPD spring 2024 labour market outlook report recommended that HR professionals:
- re-examine their approach to addressing hard-to-fill vacancies, including reviewing their employee value proposition and inclusive recruitment
- develop strategies to make retention a priority, for example through reviewing benefits, career opportunities, and offering flexible working
- supporting employee financial wellbeing as many people are still struggling with the cost of living.
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