The latest Labour Market Outlook report from the Chartered Institute of Personnel and Development (CIPD) reveals a notable trend towards job stability, with workers increasingly choosing to stay in their current roles amidst a slowdown in the labour market.
Based on a survey of 2,009 employers, the report indicates that over half (55%) of employers are aiming to maintain their current staff levels, marking the highest level since winter 2016/17.
Data from the Office for National Statistics (ONS) vacancy survey and Labour Force Survey analysis also align with the CIPD findings, indicating lower staff attrition rates in 2024 and a return to pre-pandemic turnover trends. Against this backdrop, the CIPD advocates for employers to prioritise upskilling initiatives to nurture and develop their existing workforce.
Employment Growth Expectations Decline
Expectations for workforce growth are diminishing, with fewer employers anticipating an increase in staff levels in the coming months. The report reveals that 30% of employers foresee staff level increases within the next three months, down from 37% a year ago. The net employment balance, measuring the difference between employers expecting to increase staff levels and those expecting a decrease, has also dropped from +22 to +19.
In addressing hard-to-fill vacancies, upskilling the existing workforce emerges as the most prevalent strategy, with 52% of employers opting for this approach. Additionally, 36% are expanding the duties of current staff, while 41% have increased pay in response to recruitment challenges.
James Cockett, labour market economist at the CIPD, notes a transition from the ‘Great Resignation’ to ‘The Big Stay’, as individuals seek job stability over mobility in the current labour market. He underscores the importance of employer investment in upskilling initiatives to meet evolving business demands and maintain workforce productivity.
Key Survey Findings
Despite the subdued labour market dynamics, employers’ basic pay increase expectations remain steady at 4% overall. However, notable disparities persist between public and private sector pay awards, with the public sector lagging behind. Cockett anticipates adjustments in pay rise plans in the coming months as inflation moderates and labour market activity slows further.
The survey highlights continued challenges in filling vacancies, with 37% of employers reporting hard-to-fill vacancies, particularly prevalent in the education sector (58%). Notably, one in five employers (20%) anticipate significant difficulties in filling vacancies in the next six months, rising to 39% in the public sector.
Significant divergence in workforce growth expectations is observed across sectors, with a modest net employment balance of +3 in the public sector compared to +24 in the private sector. Notably, 11% of UK employers are considering decreasing staff levels in the next three months, with the public sector twice as likely as the private sector to implement such reductions.
