Positive employment outlook set to remain for rest of 2012

The employment outlook for the rest of the year is set to remain positive, according to the latest Labour Market Outlook report from the Chartered Institute of Personnel and Development (CIPD). This quarter’s net employment balance – that is, the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease – is positive at +7, up from +5 for the third quarter of 2012.

This is the third consecutive quarter of projected growth, according to the CIPD, although the private-sector employment balance fell from +28 to +18 over the same period. The public-sector balance, meanwhile, improved, from a negative balance of -36 up to -17, which suggests hiring in the sector is picking up.

Private-sector employment figures were negatively affected by a fall in the employment balance in the manufacturing sector, down from +32 in the third quarter to +13 this quarter.

The report found temporary and part-time employment will help buoy up employment figures for the remainder of this year, with around a quarter of new employees hired on a part-time basis this quarter. Seasonal work aside, almost one-fifth of employers say they have increased their use of casual workers or staff on zero-hours contracts during the past year, particularly in the private sector. Around the same proportion (21%) say they will be increasing the proportion of temporary workers on staff during the next 12 months.

Employers plan to use fewer agency workers between now and 2013, according to the report, with around one-fifth citing this as their intention, perhaps illustrating concerns around the costs associated with the Agency Workers Directive.

Expectations around pay have only risen marginally, to a 1.7% increase over the next 12 months from 1.6% in the last quarter.

Business confidence levels are varied for 2013, the “Labour Market Outlook” suggests. More than three private-sector companies in five (61%) say they are either confident or fairly confident about their growth prospects, while around a quarter of private-sector firms report they are not confident about the growth prospects of their firm at all in the next year.

Gerwyn Davies, a CIPD labour market adviser, said: “The shift to more part-time and temporary employment looks set to continue to drive the jobs market further along the road to recovery. However, while this may drive up employment levels to reach new heights in the coming months, it may also continue to put downward pressure on the living and working standards of an increasing proportion of employees.

“Employers’ focus on cost and risk will continue to squeeze wage growth for most employees, and may compel an increasing number of people to work fewer hours in less secure forms of employment.”

The CIPD also points to a trend of “underemployment”, where people who have jobs are willing to work more hours for a variety of reasons, as one that has risen sharply over recent years and will continue to do so, “forcing workers to take whatever opportunities they can”.

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