23 August 2018

Evidence suggests that recruitment difficulties will continue into next year, the Chartered Institute of Personnel and Development (CIPD) has warned.

In its latest quarterly Labour Market Outlook (https://bit.ly/2B4a7Q5), the CIPD reveals a picture not only of continuing high employment but also of stagnating pay expectations and shrinking labour supply.

Both policy-makers and employers should focus on raising workplace productivity, it argues, especially through investment in skill development and supporting better line management capability.

While employers should encourage smarter working, the Government must ensure that its post-Brexit immigration policy enables them to acquire the skills and labour they need, including in low-skilled roles.

Addressing the issue of labour supply, the survey of 2000 employers found that the median number of applicants per vacancy across all skill levels has plummeted: from 24 in Summer 2017 to 20 this year for low-skilled roles, from 19 to 10 for medium-skilled roles and from eight to six for high-skilled vacancies.

Citing what it describes as a dramatic fall in net EU migration as one reason for the shortages, the CIPD notes that 66% of employers with vacancies report that at least some of them are proving hard to fill – up from 61% in Spring 2018 and 56% in Spring last year.

(Data from the Office for National Statistics (ONS) for April to June 2018 shows that the number of EU nationals working in the UK fell by 86,000 to 2.28 million, which was the second consecutive annual fall recorded and the largest one since comparable records began in 1997.)

Although labour is in short supply, the outlook for wage growth remains relatively subdued for large parts of the UK workforce, the CIPD points out, “as median pay rise expectations hover at 2%”.

The CIPD has for the first time published a “Practitioners’ guide to the Labour Market Outlook” (https://bit.ly/2MqPWAc) with recommendations on how to address both opportunities and risks.