Last reviewed 27 September 2021

While a net balance of 50% of firms are expecting to expand their workforce in the next year, the latest CBI and Pertemps Network annual survey has found that 76% are reporting access to labour as a threat to the UK’s labour market competitiveness.

This is the highest proportion since the question was first asked in 2016.

Access to skills (noted by 77% of companies) and the ability to move UK workers across the EU (69% of respondents) also feature heavily in businesses’ list of current concerns, the survey found.

Asked for their top three factors vital to labour market competitiveness, 89% said finding enough people with the right skills, followed by a flexible labour market (47%) and a healthy workforce (35%).

Nearly seven in 10 firms (68%) are planning to either increase pay in line with or above inflation, the highest percentage since the question was first asked in 2009.

As employees return, businesses are expecting changed working patterns to stay in place.

Compared to working pre-pandemic, over three-quarters (76%) expect the use of hybrid working to increase, 40% expect full-time remote working to increase and 58% expect informal flexibility to increase in their organisation.

Covid-19 safety measures will be kept in place by 59% to support employees’ confidence when it comes to returning to offices.

“After a challenging year it’s encouraging to see the jobs market rebound,” CBI Chief Policy Director, Matthew Fell, said. “With demand returning, businesses both small and large, have put their recruitment plans into action. But as the UK’s labour market emerged from one crisis, it’s been plunged into another, with shortages holding back growth.”

Comment by Kate Palmer, HR Advice and Consultancy Director at Peninsula

The Covid pandemic has had a devastating impact on staffing resources and recruitment opportunities.

However, as we work our way forwards and business starts to open up, employers should be prepared for identifying strategies for attracting talent and driving growth.

Flexible working is becoming a key priority for employees, so highlighting flexible working options and arrangements within job adverts can help appeal to a wider range of applicants.

Similarly, by understanding what motivates employees and makes them feel valued, employers can tailor their company culture, so staff are excited to work there. Doing so also contributes towards long-term retention and improved productivity.