The quarterly Labour Market Outlook, produced in partnership with the The Adecco Group UK & Ireland provides a set of forward-looking labour market indicators and according to the CIPD Executive Summary there is a strong indication that UK labour market is tightening, the net-employment balance which measures the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels is at its highest level since it was introduced in 2012/13.
When you sit this alongside the 1Q GDP figures there is a disconnect but could it be that employers have finally realised that they cannot wait for the Brexit deal to be 100% resolved and that their businesses need to talent to grow and that much overdue change needs to happen or UK businesses will fall behind on the global stage. The March EU Council solution for EU citizens is a boost but beyond that general demographic shifts in the workforce are also adding their challenges.
One factor that TMP believe is critical for future proofing talent is to look beyond hiring just for the skills for the role today but to look at the whole person and capability so talent has the ability to grow and adapt into changing roles which is a certainty.
The surprising degree of optimism among employers poses a conundrum to our understanding of the current state of the UK labour market and economy. One explanation is that the recent agreement between the UK Government and EU at the March Council meeting may have ended uncertainty for some employers in the short/medium term. The settlement gives EU citizens that arrive during the transitional period the right to stay here indefinitely if they stay here for a continuous period of five years. This development could therefore be good news for labour demand/supply. A second factor may be that employers will need more people to employ because of changing demographics. According to the Bank of England, overall labour supply is expected to fall in the coming years, partly due to an increasing proportion of older workers, who tend to work fewer hours.