The hiring boom that has hit the UK could soon reach its peak, according to the latest Labour Market Outlook from the CIPD.
The CIPD predicts that, while hiring intentions will remain bullish for the next quarter, high inflation and the prospect of a recession later this year will make the trend unsustainable in the longer term.
Expectations of pay awards reached 4% in the private sector, according to the HR body’s latest figures, the highest since it began publishing the outlook in 2012. The median expected pay increase across all sectors is 3%.
Many employers continued to grapple with hiring difficulties during June and July, the CIPD found. Although 72% of employers expect to recruit in the next three months, almost half (47%) have vacancies that are hard to fill.
Public sector hiring intentions were the highest, with 84% of employers planning to hire new staff over the next quarter.
Hiring intentions
The sectors facing the most difficulties in filling roles were education (56%), transport and storage (55%) and the voluntary sector (53%). Only 13% of organisations polled by the CIPD planned to make redundancies over the same period.
Employers are deploying a number of tactics to overcome hiring challenges, including upskilling existing staff – cited by 41%, advertising more jobs as flexible (35%) and raising wages (29%).
Jonathan Boys, the CIPD’s labour market economist, said offering ever higher pay awards in a bid to attract staff could not last forever.
“To deal with the cost-of-living crisis, employers will have to look at other ways they can support their people. Employer benefits that help reduce the cost of housing, travel and childcare will be of particular value to those on the lowest incomes,” he said.
“Forecasts of a recession may dampen employers’ recruitment plans in time, but for now, the UK is still in the grips of a hiring boom, with nearly three in four employers planning to take on more staff.”
Boys added that the government should capitalise on employers’ appetite to upskill existing staff.
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“It’s vital employers have the right support mechanisms in place to access the training they need. Reform of the apprenticeship levy could help by enabling organisations to spend the levy on training that best suits their business’s needs at this crucial time,” he said.
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