By Valentina Magri
Signs of life are stirring from Britain’s labour market after several years of stagnant growth.
That’s the conclusion of the latest CBI-Accenture employment trends survey, conducted between September and October 2013. The respondents – senior executives from firms of all sizes and sectors – reported there is light at the end of the tunnel for the jobs market, with 51 per cent of employers expecting their workforce to be larger this year and only 12 per cent expecting a reduction in the number people they employ.
A positive balance in the jobs market – +39 per cent compared to +20 per cent last year – is now on the cards, reflecting the best level in the private sector since the onset of the recession in 2008-2009. Crucially, workforce growth is expected in every part of Britain, ranging from 38 per cent in East England to 52 per cent in Humberside and Yorkshire. Contrary to reports that economic growth in Britain is worryingly centred on the capital, signs of life in the jobs market seems to be dispersed throughout the country.
Improving employment prospects look to be permeating all aspects of the economy. The private sector is reporting growth across the board, suggesting that the current economic recovery is being built on sturdier foundations than previous ‘green shoots of recovery’ which have been championed prematurely in the past.
Arguably the most important result to emerge from the employment trends survey is in regards to youth employment. A massive 81 per cent of firms reported they expect to have suitable positions for those aged 16-24 seeking work. In addition, 20 per cent of companies plan to increase their graduate staff this year and 34 per cent are going to hire apprentices.
A recent report by the Prince’s Trust revealed 40 per cent of young people have faced symptoms of mental illness, including self-loathing and panic attacks, as a result of being out of work. As economic life returns to Britain, ensuring future generations secure employment will be vital to the country’s long-term prosperity.
Meeting the living wage
One of the sad tales of the recession has been that even those in employment are struggling to get by. As inflation rises real-wage levels have decreased, which has impacted the economy as a whole as austerity conditions restrict household spend. Thankfully, change may be on the cards in 2014.
Only eight per cent of companies plan to freeze wages in the new year, which is half the level of last year. However, in order to make the pay rise happen, statistically speaking, a higher productivity is required. Indeed, only 12 per cent of the respondents think that a higher wage should be made mandatory and applied to all businesses regardless the circumstances. Furthermore, 39 per cent of the companies are planning a pay rise below RPI inflating or they are targeting an increase on certain staff only.
In some cases, it seems, an improving jobs market may not be the saviour it appears to be.
High growth, depressed market
Despite the positive job prospects, the UK is not currently in the best position it could be. The CBI-Accenture employment report signals that there are some unsolved problems in the labour market. For example, businesses are concerned about the likelihood of significant actions to tackle what they consider current threats: English employment law, European regulation, skills shortage, migrant workers, uncompetitive labour costs.
Aside from these fears, the employment landscape suffers from other diseases. Despite a resilience in the English labour market (rising employment and increasing full-time jobs), the employment rate is yet to fully recover. Besides, productivity has been stagnating during the downturn. In particular, youth (the “class of the crunch”, as named them the Financial Times) is the most penalised by the recession. The number of NEETs (Neither in Employment, Education or Training) is still too high: more than a million youngsters aged 16 to 24 in the three months to September 2013, and there are more than 450,000 youngsters having been unemployed for more than two years.
To conclude, the report seems to show signs of life in a deeply depressed jobs market. English employment prospects are improving, but there is still a long way to go. Ready to start?