It seems that leading professional bodies take differing views on the current employment data, who is right?
CIPD’s economist unsure about labour market enigma’
The number of people in work in the UK will grow this year to reach 30 million before the next general election in 2015, according to the CIPD’s annual labour market barometer with the private sector experiencing strong jobs creation in an atmosphere lacking economic growth.
The CIPD’s newly appointed chief economist Mark Beatson highlights the key factors he considers responsible for the current higher than expected employment as:
- employers holding down labour costs by offering below inflation wage rises;
- “labour hoarding” where employers are retaining skilled staff more than they have in previous economic downturns; an increased supply of workers; and
Being rather cautious Beatson also sounds a warning to organisations that are “labour hoarding” saying “significant reserves of skilled workers “cannot be sustained forever” raising the spectre of future lay-offs if business confidence is dented.”
Perhaps Beatson simply does not have sufficient a clue about the labour market and the lean economy; failing to realise that years of consistently cutting back and undertraining skills has reached such a level that further cuts will seriously stymie production and risk future growth. As such, we have no slack in the labour supply to cut!
UK Manufacturing Jumps To 15-Month High
On a more certain note, the Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) rose to a 15-month high of 51.4 in December from an upwardly revised 49.2 in November. It is now far stronger increase than was predicted in a Reuters poll of 24 economists. Take that Mr Beaston!
Britain’s economy is forecast to shrink 0.1pc in the last three months of 2012, but stronger-than-expected official services output data for October, released just before Christmas, raised the prospect that the economy will avoid contraction.
It is useful to note that the manufacturing index’s upturn takes it above the 50-mark that separates growth from contraction for the first time since March.
Organisations Optimistic About Hiring
The Recruitment and Employment Confederation’s (REC) most recent survey of 600 UK employers reveals that 99% of respondents plan to either increase or maintain their permanent staff in 2013. In addition, 88% of employers say they will increase or maintain their temporary staff headcount next year.
Kevin Green, Chief Executive of the REC, says: “These are encouraging signs for jobs growth in 2013. Based on the feedback from both employers and recruiters it looks like employer confidence is genuinely bouncing back. Even though the wider economic outlook may still be uncertain and growth forecasts have been revised downwards, the resilience of this country’s labour market cannot be in doubt.”
He added: “The flexibility within our labour market means that we have not been hit with the same difficulties as our European neighbours and we believe that job growth is set to continue in the New Year.”
Institute of Leadership & Management Survey Findings
Some 57% of workers intend to stay at their current organisation in 2013 according to a poll published recently by the Institute of Leadership & Management (ILM).
In a survey of over 1,300 managers, one in seven are planning to look for a new job in 2013. One in 20 said they intended to set up their own business and a further 5% are looking to embark on a totally new career.
Almost a third (29%) of managers are intent on improving their work-life balance next year, and when asked what skills they would like to develop in 2013, leadership came top (38%), time management second (16%) and communication joint third with technical skills (15%).
Perhaps some explanation for the desire to improve work life balance can be seen in the official data that shows an increase of 2.6 per cent in the total number of hours worked, and the average number of hours worked by both full-time and part-time workers having also increased.