UK firms' hiring plans at year-long high

The hiring intentions of UK companies are now at their highest since the onset of Covid-19 pandemic early last year, according to a new survey.

The survey, conducted by the Chartered Institute of Personnel and Development (CIPD) and recruitment company Adecco, also found that, over the past three months, the number of companies anticipating redundancies had fallen amid a brightening economic outlook.Some 56 per cent of the 2,000 respondents said they now planned to increase staff numbers in the coming months, up from 53 per cent at the end of last year. The figure, however, is still below the 66 per cent planning to increase their workforces before the pandemic struck.Additionally, the percentage of companies expecting to make redundancies has now fallen to a fifth from almost a third in Q4 of 2020.The CIPD/Adecco's latest 'Labour Market Outlook' said that UK unemployment appeared close to its peak, but warned that the jobless total could rise sharply again if Chancellor of the Exchequer Rishi Sunak did not extend existing jobs support schemes in next week's Budget.Gerwyn Davies, senior labour market adviser at the CIPD, said: “These are the first signs of positive employment prospects that we've seen in a year."Our findings suggest that unemployment may be close to peak and may even undershoot official forecasts, especially given the reported fall in the supply of overseas workers."However, it is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme to the end of June or if the economy suffers any additional unexpected shocks."It would be hugely counterproductive if the government’s financial support faltered while some of the biggest sectors of the UK economy are still in survival mode.” The survey found that sectors with the strongest hiring intentions included healthcare (80 per cent), finance and insurance (65 per cent), education (65 per cent) and information and communications (67 per cent).However, the report added, "this optimism does not extend to sectors that continue to be affected by the social distancing measures", such as hospitality.Alex Fleming, Northern Europe president at Adecco Workforce Solutions, said the start of this year had been challenging for many UK companies with the country experiencing its third Covid-19 lockdown.But he added: "It is still positive to see some signs of labour market recovery, with a clear rise in net employment intentions."As we continue to transition into the new era of work, government support will remain a key factor in helping to minimise any further jobs fallout. Investing in reskilling and upskilling will also remain an important tactic in future proofing the workforce."Even with a Brexit deal and the vaccine rollout underway, there is uncertainty, particularly among the younger generation, when it comes to remaining in the UK for work."Therefore, companies that invest in career development, enhancing the skillsets of employees and maintaining a positive workplace culture will help to strengthen their talent attraction and retention strategies during what remains such an unprecedented time.”  

Read more news and views from David Sapsted.

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