The Short-Term Employment Market Has Seen Rising Optimism In Recent Months, According To The CIPD

A new report from the Chartered Institute of Personnel and Development (CIPD) has found that optimism in the short-term employment market is rising.

Surveys sent out to businesses across the UK, including a large number of small and medium sized firms, have shown that employers are becoming more willing to increase their staffing levels.

Optimism was highest in the manufacturing and production sectors, as well as the retail industry, with companies in the south-east of England performing particularly well as they are backed by a steadily improving macro-economic climate.

Gerwyn Davies, labour market adviser at the CIPD, commented: "The relationship between pay, productivity and employment is key to understanding the performance of the labour market in recent years.

"Nonetheless, while it appears that low productivity and falling real wages have helped maintain employment levels, it seems that rising demand and restructuring have also been having an important impact on resourcing decisions in many firms."

However, Mr Davies said that despite some very positive economic news in recent quarters, longer term employment may struggle to rise in some areas. This will depend heavily on UK businesses' ability to export and access emerging markets like China, Brazil and Russia.

Pay across the 1,000 firms surveyed was seen to rise slightly below the rate of inflation, which currently sits at 2.7 per cent.

Companies disclosed an average remuneration increase of 2.5 per cent, but this is significantly higher in the manufacturing and production sector, which has seen its order books become healthier in recent months thanks to improved domestic demand.

James Reid, UK and Ireland Managing Director of SuccessFactors, a human capital management company, said that up-skilling current employees and improving retention should be the highest priorities for growing businesses, although in the long-term hiring staff is also a vital endeavour.

Analysts have forecast the UK economy to grow substantially in 2014 and the Confederation of British Industry recently upped its output prediction to 2.4 per cent.

Expert Opinion

Although it is encouraging to see a rise in short-term recruitment, we certainly agree with the sentiment of this report and the importance of long-term employment. This can only be achieved through a rebalancing of the economy including a shift towards more manufacturing and exporting. This is something that SMEs can play a vital role in and we continue to support business owners to achieve this. <br/> <br/>“Whether a business is looking to increase its workforce either in the short term or long-term, it is vital that they consider all the legal issues and implications.” <br/> Fergal Dowling - Partner