Government urged to boost productivity

The manufacturing sector saw optimism over recruitment climb sharply in the CIPD's latest outlook report
The manufacturing sector saw optimism over recruitment climb sharply in the CIPD's latest outlook report
0
Have your say

Employers expect to raise wages by 1.8 per cent in the coming year, according to research.

The Chartered Institute of Professional Development (CIPD) said that 2015’s wage inflation outlook remains at half the pre-recession level of 3.6 per cent, despite optimism for recruitment.

The latest labour market outlook saw the net employment score - which compares firms planning to hire versus those decreasing staff - climb one point to +25 since the last quarter.

Manufacturing and production saw its score almost double, from +28 to +51, while the services sector dropped seven points to +31.

However, the survey of more than 1,000 employers predicted a 1.8 per cent rise in basic pay, down from two per cent three months earlier.

The CIPD urged the newly-elected Government to support businesses to invest in skills and increase productivity.

Gerwyn Davies, labour market analyst for the CIPD, said companies are not under pressure to increase pay packets.

He said: “The proportion of people switching jobs remains well below pre-recession levels despite recent increases, while labour supply remains strong, especially from migrants, welfare claimants entering the labour market and older workers staying in work for longer.”

The forecast of very low inflation has also led to many employers “hitting the pause button on play”, he said.

“It seems that ‘stable’ has become the new ‘ambition’ for both individuals and businesses, which could go some way to explaining the UK’s productivity woes,” Mr Davies added.