UK recruitment activity will rise as unemployment peaks, says new survey

BY Fraser Tennant

Recruitment activity in the UK will rise in the first quarter of 2021 as unemployment plateaus, according to a new report by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group. 

The ‘CIPD/Adecco Labour Market Outlook’ report, based on a survey of 2000 UK employers, reveals that over half (56 percent) indicated they are looking to recruit in Q1 2021, up from 53 percent in the previous quarter and 49 percent six months ago. This is down from 66 percent during Q1 2020. 

In terms of sectors, healthcare, finance and insurance, education, and information and communications have indicated strong hiring intentions. Other sectors however, such as hospitality, which continues to  be affected by social distancing measures, are less optimistic. 

In the private sector, companies have signalled a willingness to maintain their workforce, with the number of employers stating that they are planning redundancies dropping from 34 to 20 percent.

“These are the first signs of positive employment prospects that we have seen in a year,” said Gerwyn Davies, senior labour market adviser at the CIPD. “Our findings suggest that unemployment may be close to peak and may even undershoot official forecasts. However, it is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme or if the economy suffers any additional unexpected shocks.”

To this end, the report urges the UK government to extend the coronavirus (COVID-19) job retention scheme until at least the end of June to help support sectors most affected by the restrictions.

“The start of 2021 has been challenging, with the UK entering into its third lockdown,” said Alex Fleming, region president of Northern Europe at Adecco Workforce Solutions. “It is still positive to see some signs of labour market recovery, with a clear rise in net employment intentions. The furlough scheme and redeployment have enabled many organisations to avoid redundancies during the pandemic.”

The report also notes that investing in reskilling and upskilling will be important tactic in future-proofing the workforce – a key factor in helping to minimise any jobs fallout.

Mr Fleming concluded: “Companies that invest in career development, enhancing the skillsets of employees and maintaining a positive workplace culture will help to strengthen their talent attraction and retention strategies during what remains such an unprecedented time.” 

Report: CIPD/Adecco Labour Market Outlook

One in three UK firms expect to cut jobs, says new research

BY Fraser Tennant

One in three companies in the UK expect to make redundancies in the third quarter of 2020, according to a new report by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group.

The report, based on a survey of more than 2000 employers, found that employment confidence has fallen in all three sectors of the economy: private, public and voluntary. In the private sector, 38 percent of firms plan to make redundancies, compared to 16 percent in the public sector.

Overall, the figures represent a 50 percent jump in the number of employers expecting to cut jobs compared to three months ago.

“Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” said Gerwyn Davies, senior labour market adviser at the CIPD. “Hiring confidence is rising tentatively, but this probably will not be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months.”

That said, amid the gloomy forecast, there is some positivity. “Nearly half (49 percent) of UK employers are planning to recruit over the next three months,” said Alex Fleming, country head and president of staffing and solutions at the Adecco Group UK and Ireland. “We are also seeing more candidates applying for high skilled roles, which aligns with the trend of people sourcing alternate forms of education in order to upskill and expand their knowledge.”

Other key findings of the report include: (i) a large variation across sectors in terms of the net employment balance, with employment confidence highest in healthcare and public administration, and lowest in hospitality, transport and storage, and retail; (ii) in terms of the nations and regions, confidence is highest in Wales and North East England, and lowest in the West Midlands and Scotland.

In addition, more than four in 10 employers have implemented recruitment freezes. The proportion of organisations adopting a recruitment freeze is significantly higher for the private sector than the public sector, especially in hospitality, business services and IT.

“Businesses must demonstrate resilience and adopt new approaches to closing the skills gap by investing in upskilling and reskilling workforces,” concluded Mr Fleming. “Creating a positive workplace culture is also integral to maintaining focus, engagement and motivation among existing employees.”

Report: Labour Market Outlook: Summer 2020

Increasing automation leading to under-performing workers says new report

BY Fraser Tennant

More than one in four UK workers are “not performing their best at work”, with increasing automation a key concern, according to a report published by Deloitte this week.

In its ‘Voice of the workforce in Europe’ report, Deloitte highlights that 32 percent of UK workers say they are not stimulated by what they do, with 36 percent stating what they do is not meaningful. In comparison, on average, just one in four European workers (24 percent) say they are not stimulated by what they do, and fewer than one in five (18 percent) believe what they do is not meaningful.

“For the UK to remain a globally competitive economy, more must be done to address productivity in our workplaces and the ever widening skills gap,” said Anne-Marie Malley, UK human capital leader at Deloitte. “Businesses are facing an uphill struggle to address these factors which is leading to dissatisfaction, disengagement and despondency among employees. Employers must offer more support to strengthen their worker’s skills and communicate the value their roles are bringing to their company, the economy and ultimately society as a whole.”

The Deloitte report research also highlights that almost half of UK workers are already feeling the impact of automation, with 44 percent of workers stating that some of the tasks they did five years ago have been automated and are now done by robots or software, up from a European average of 38 percent of workers. Additionally, 34 percent in the UK say that entire business processes relevant to their job have been automated over the past five years, up from 30 percent of overall European workers.

Overall, workers across Europe appear relaxed about the future impact of automation. Regarding their own jobs and how they will evolve over the next 10 years, about three-quarters (76 percent) of respondents say they only expect slow, small, or no change at all. In the UK, four in five (83 percent) do not expect any major changes to their job over the next decade.

“The reality is that the future of work is now, and automation is already impacting day-to-day roles,” said Ms Malley. “Awareness will provoke action, so it is important for businesses to educate workers on how their roles will be augmented by technology over the next decade.”

Deloitte’s research was based on the attitudes and views of more than 15,000 people across 10 European countries, including 2043 from the UK.

Report: Voice of the workforce in Europe

UK financial sector wants immigration reform

BY Richard Summerfield

With less than a year to go until the UK’s exit from the European Union becomes official, there is still a great deal of uncertainty surrounding the process. However, the financial services sector, given its importance to the UK’s economy, is making its feelings known. A new report from EY and TheCityUK, ‘The UK’s future immigration system and access to talent’, has suggested that the government must urgently review the country’s immigration system if it hopes to succeed post-Brexit.

Ensuring that the UK’s financial sector is able to access skilled overseas talent is vital to the UK maintaining its pre-eminence as the leading international financial centre, the report claims. The sector raises more than £70bn per year in taxes. However, the cost of bringing skilled European workers into the UK could increase by up to 300 percent if existing immigration rules are applied unchanged to European citizens, and if planned Tier 2 visa fee increases come into effect.

“As we approach Brexit, there is a real need to review and reform the UK’s immigration policy to ensure it supports businesses and skilled overseas talent looking to contribute to the UK economy. The current Tier 2 visa system is out of date – we need a much more flexible and dynamic system, which responds to today’s very real skills shortages, particularly around technology, which will worsen if not addressed,” said Margaret Burton, a partner at EY. “People are the foundation of any company. Without access to the right talent, the UK’s future position as a global business leader will be under threat.”

“Britain’s success is built on openness,” said Miles Celic, chief executive officer of TheCityUK. "Being able to attract and retain the most talented people with the right skills, from both the UK and overseas, is a top priority for business leaders across the industry. The UK’s ability to draw global talent has long been a competitive advantage. Losing this could undermine Britain’s position as the world’s leading financial centre. A basic immigration system that is fit for the UK’s needs, future focused and fair is essential. Simply applying the current immigration system for non-European citizens to European citizens after Brexit will not work. Doing so is likely to worsen existing skills shortages and make it much harder to attract the talent British firms need to compete on the world stage following Brexit.”

The report sets out nine key recommendations which could reform the UK’s immigration system and still allow firms to access global talent while reducing the skills shortages which are holding back UK economic and productivity growth.

However, the financial services space is not the only industry demanding the government take action. The healthcare and agriculture sectors have also demanded unimpeded access to international talent after Brexit. Such demands will place additional, considerable strain on the government which is already struggling to map out a Brexit which will please ‘Leave’ voters, many of whom want tougher immigration controls.

Report: The UK’s future immigration system and access to talent

Mind the gap – still

BY Richard Summerfield

There have been some marked improvements in the workplace for women in the UK in recent years, according to a new report from PwC – ‘Women in Work Index 2017’ – which is based on data from 2015. The report notes that not only have female employment rates improved, there has also been a narrowing of the gender pay gap and a reduction in the gap between male and female labour force participation rates.

However, the progress made of late can only be seen as a qualified success, according to PwC. The report, in which PwC measures levels of female economic empowerment across five key areas – the gender pay gap, female labour force participation, the gap between male and female labour force participation, female unemployment and female full-time employment rate – indicates that in many OCED countries, there is still considerable work to be done.

There has been some significant progress made in a number of jurisdictions, however. The UK, for example, now ranks 13th out of 33 OECD countries, second to Canada in the G7 in terms of female economic empowerment. However, the UK still lags behind on the number of female workers in full-time employment, ranking 30th out of 33 countries, well below the OECD average. Indeed, the UK has only a small proportion of women in full-time work, leaving it in 13th place behind the Nordic countries, Poland and Canada. However, it is ahead of France, Germany, the US, Japan and Italy.

The portion of UK women in full time work is not the only issue, however. It is important for women to be employed in a greater variety of industries, including those that offer better career opportunities. "It's not just about getting more women working, but also about getting more of them into high quality jobs that offer career progression and flexibility," said Yong Jing Teow, an economist at PwC.

While the gender gap does appear to be closing, it will take time to achieve gender parity. According to PwC’s estimates, in the UK at least, the gap will finally close in 2041. Across Europe, however, progress could be quicker. PwC’s data suggests that Poland, Luxembourg and Belgium could close their respective gaps within the next 20 years. The US will not see its gap closed for at least another 50 years. Germany will not see its gap closed for another century, if current historical trends continue, and Spain’s  may not close for over 200 years.

Closing the gender pay gap would be lucrative in the long term. Achieving pay parity in the OECD, for example, could increase total female earnings by $2 trillion.

Report: PwC Women in Work Index 2017