Employment confidence in Yorkshire at nine-year high

Employer confidence in Yorkshire has surged to a nine year high as the region's labour market bounces back, according to new CIPD research.
The CIPD said recruitment intentions are strong in YorkshireThe CIPD said recruitment intentions are strong in Yorkshire
The CIPD said recruitment intentions are strong in Yorkshire

The CIPD’s quarterly Labour Market Outlook found that over two in three (69 per cent) Yorkshire employers are planning to take on new staff in the next three months and many plan to upskill existing staff in a bid to tackle labour shortages.

The CIPD, the professional body for HR and people development, said this suggests recruitment intentions are strong in Yorkshire.

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The new research revealed that 9 per cent of employers in Yorkshire plan on making redundancies, which is below the national average of 13 per cent.

The net employment balance – which measures the difference between employers expecting to increase staff levels in the next three months and those expecting to decrease staff levels, stands at plus 45 for Yorkshire, which is greater than the national average of plus 32.

More than four in 10 (44 per cent) employers in Yorkshire report that they have "hard to fill" vacancies, which is above the national average of 39 per cent.

The CIPD said employers are indicating strong employment intentions for the third quarter of 2021, with confidence surpassing pre-pandemic levels to hit a nine year high.

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For the UK as a whole, the net employment balance has risen for the fourth consecutive quarter

The figure now sits at plus 32, up from plus 27 in the last quarter, marking the strongest employer intentions seen since tracking began in winter 2012/13.

The survey, which is forward-looking, found recruitment intentions are particularly strong. More than two-thirds (69 per cent) of employers plan to recruit in the three months to September 2021, up from 64 per cent in the last quarter and 49 per cent this time last year.

The CIPD said there has been a dramatic shift in hiring intentions in certain sectors since summer 2020.

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Just 26 per cent of hospitality/arts/entertainment employers were looking to hire last summer, increasing to 72 per cent this summer.

In transport and storage, this has increased from 33 per cent to 65 per cent of employers looking to hire.

Both of these sectors have been hit by the pandemic and changes to immigration as a result of Brexit, and are suffering from widely reported labour shortages.

When asked how employers with "hard to fill" vacancies will deal with the situation, over two fifths (44 per cent) said they would upskill existing staff, a quarter (26 per cent) said they would hire more apprentices, and 23 per cent said they would raise wages.

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The CIPD said these tactics suggest employers are focusing their efforts on retaining the current workforce to address labour supply issues, as well as increasing recruitment.

Jonathan Boys, labour market economist for the CIPD, said: “This is an incredibly strong set of data and paints a very different picture to employer intentions a year ago.

"Employers are very optimistic, indicating strong recruitment intentions and redundancy expectations appear much lower than originally predicted during the pandemic.

“Over the last year, employers have been able to flex the workforce to meet demand by using the furlough scheme to rapidly expand and contract staffing levels at minimal cost."

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"This will no longer be a viable strategy as the scheme winds down, so we’ll see recruitment and retention pick up the slack as employers look to plug any gaps in their workforce."

Mr Boys said employers will need to think more long term about how they meet skills needs, with difficulty finding labour in some sectors,

"It’s important for organisations to look carefully at their recruitment and retention strategies and consider where they need to develop these, for example by increasing investment in training and reskilling," Mr Boys added.

"Retention strategies should be built with boosting job quality in mind, as employers have a huge role to play in improving working lives.”

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The number of UK employers looking to make redundancies has settled at around 13 per cent, compared with 33 per cent in summer 2020.

The CIPD said its survey covers employer expectations up to the end of September 2021, which suggests that the end of the furlough scheme should be a relatively smooth transition with minimal job losses.

Over four fifths (81 per cent) of UK employers are planning a pay review in the 12 months to June 2022.

Among these employers, a third (33 per cent) expect a pay increase, 12 per cent expect a pay freeze and just 1 per cent expect a pay decrease. Over two-fifths (37 per cent) said it is hard to tell and will depend on their organisation's performance.

The CIPD said that median basic pay settlements remain at 2 per cent, the same as last quarter. This is an uptick from the 1 per cent reported for four consecutive quarters in 2020.

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