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Job creation continues but uncertainty climbs
Firms are on track to create more jobs, adding to the UK’s record labour market performance, according to the latest CBI/Pertemps Network Group Employment Trends Survey.
The annual survey – now in its twenty-first year, with 350 respondents employing around 1 million people – revealed that 45% of businesses across the UK expect to grow their workforce in the year ahead, with confidence highest among small and medium sized employers (46%). However, there is a Brexit drag weighing on larger firms, with optimism about adding new jobs at its weakest among businesses more exposed to the uncertainties posed by Brexit.
Confidence though is ebbing, with nearly half of UK businesses (48%) saying that the UK has become a less attractive place to invest and do business over the past five years. Firms are still reporting access to skills as the most significant threat to the UK’s labour market competitiveness, with 83% stating it is a worry (up from 79% in 2017). With a new immigration system due to replace the free movement of people when the UK leaves the EU, six in ten firms are concerned about access to enough labour (up from 49% in 2017) and three in five firms (59%) see the ability to move UK workers across the EU in future years as a threat.
Matthew Fell, CBI Chief UK Policy Director, said: “Britain’s job market is in good health, but this survey also shows a worrying trend that there aren’t enough sufficiently skilled people to fill the number of job vacancies.
“It’s encouraging to see firms across the country investing in training their staff and helping them develop new skills. But this investment alone is not the silver bullet that will meet all our needs. Business and the Government need to plug the skills gap and champion the flexible labour market on which our economic strength relies, to ensure investment continues to flow in.
“Weak productivity is a significant challenge for the UK economy, and has a knock-on effect on living standards. While some firms are investing in new technologies to tackle this problem, many say stepping up their efforts to create a more diverse and inclusive workplace is an important part of becoming more productive – as well as being the right thing to do.
“To ensure the UK remains an attractive place for firms to invest and create jobs, it’s also critical a Brexit deal is secured quickly, otherwise the country risks sliding towards a national crisis. Politicians move on from the endless infighting of the past 30 months and come together to secure a workable Brexit deal.”
Carmen Watson, Chair of Pertemps, said: “Employment is on the rise and optimism is high among employers. Businesses are remaining competitive but, against a continuing backdrop of skills shortages, what we are seeing is an increasingly employee-driven market. Candidates know their value and want to be rewarded with fair pay and benefits commensurate to their role. It’s encouraging, therefore, to witness organisations attracting and retaining talent through learning and development initiatives and increased engagement.
“Diversity remains on the agenda for UK businesses which, as a diversity advocate myself, I am delighted to see: organisations are waking up to the requirement of improving all spheres of diversity including gender and reducing pay gaps. Opportunities should be available to everyone and this will only strengthen the success of businesses moving forward.”
Firms are continuing to push for a diverse and inclusive workforce
Encouragingly, nearly nine in ten businesses (88%) see a diverse and inclusive workforce as important or vital to their future success. A majority have also reported they have taken action to increase workforce diversity, by improving progression opportunities (62%), training for line managers (55%) and introducing flexible working opportunities (54%).
The result for firms is an increased ability to attract and retain people (60%), an increase in skills and capabilities (50%), as well as increased levels of staff engagement (47%).
Nearly all firms are taking action to reduce the gender pay gap (93%) and improve gender diversity at all levels of businesses (50%).
Companies support introducing mandatory ethnicity pay gap reporting, but this survey finds that few (17%) are already well prepared to do so. Government must work with business and give a good implementation period to ensure that all companies are well prepared to report on time.