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Dissecting the latest CIPD Labour Market Outlook report

Written by Kimberley Startup | January 13, 2014 | 0 Comments
Tick-300x256It’s always vital for the movers and shakers in staff recruitment to keep a close eye on the latest reports providing facts and figures in relation to jobs, redundancy and pay intentions, and it’s difficult to think of a more reputable such report than the quarterly Labour Market Outlook (LMO) of the Chartered Institute of Personnel and Development (CIPD). The most recent one was released in November 2013, its findings drawn from a poll of 1,020 employers.
How are employment confidence levels? The answer is that they are very good, at least in the short term – indeed, near-term employment confidence is at its highest level since the beginning of the report in 2005. The difference between the proportion of employers that expected to increase staff levels and those that anticipated decreasing staff levels in 2013’s fourth quarter makes up the quarter’s net employment balance. In the most recent LMO, it was +24, a marked improvement on the summer report’s +14.
These enhanced prospects of firms recruiting staff can be largely attributed to private sector firms, which recorded an improved net employment balance of +38 for the final quarter of 2013, compared to the previous report’s +26. Manufacturing and production enjoys especially strong employment prospects of +39, although an even higher +51 score was recorded for the wholesale, retail and motor trade sectors. SMEs (+55) and employers in the south-east of England (+35) are also showing especially high employment confidence.
There is still some less positive news, of course, with the -19 score for the public sector unsurprising, although this was nonetheless a healthier score than in previous reports. The north of England (-5) also looks set for employment contraction. Some commentators would also question employers’ medium-term confidence in the strength of the economic recovery, given the fewer than one in five employers that stated that they would boost their staff numbers by more than 2 per cent in the event of economic growth returning to a “more stable position of consistent growth of 2 per cent or above.”
However, the report’s results suggest that the greater drags on employers’ willingness to recruit staff in greater numbers in the medium term may be fixed staffing budgets and potential scope for existing employees to increase their productivity. It appears that employment growth may have been helped by low productivity and a decline in real wages, although private sector employers have also cited rising demand, restructuring and entering new markets.
The overall picture is of further employment growth being expected in the short term, but less certainty about how strong prospects will be in the medium term. Depending on the strength of the recovery, it does at least look like we can expect a further gradual reduction in unemployment. Contact Webrecruit ( now about how an online recruitment campaign with us can source you the right talent to make the most of the economic resurgence.

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