Key facts
- The UK jobs market is largely stagnant due to high employment costs, according to the CIPD.
- Private sector employment intentions are at their lowest levels outside the COVID-19 pandemic.
- The net employment balance is at plus nine, indicating a 'low hire, low fire' environment.
- Only 57% of employers plan to hire in the next three months.
- 31% of employers report hard-to-fill vacancies, particularly in sectors like construction and healthcare.
- The CIPD recommended reversing national insurance contribution hikes to encourage hiring.
The UK's labor market is experiencing a significant slowdown, with private sector employers showing the lowest hiring intentions outside of the pandemic period. The Chartered Institute of Personnel and Development (CIPD) reports that the net employment balance remains at a low of plus nine, indicating a 'low hire, low fire' environment. This stagnation not only blocks new entrants into the workforce but also hinders career progression for existing employees and impacts the talent pipeline for businesses.
According to a survey of over 2,000 businesses by the CIPD, only 57% of private sector employers plan to increase hiring in the next three months, a figure near its lowest point outside of the pandemic. While overall vacancies have decreased, a substantial 31% of employers still face challenges in filling positions, particularly in sectors like construction, healthcare, and social care, highlighting persistent skills shortages.
To address this, the CIPD has called for bolder measures to boost employer confidence. Specifically, they urge for a reversal of the increases to employer national insurance contributions (NICs) implemented by former Chancellor Rachel Reeves. The organization also advocates for canceling the planned abolition of age-based wage levels, arguing these steps would make it easier for businesses to create more entry-level jobs.