The CIPD has revealed a promising outlook for the labour market post-pandemic as hiring optimism among employers reaches the highest level in eight years. 

According to a new report from the CIPD and Adecco, the anticipated demand for labour has risen sharply between the winter and spring quarters, with employment intentions rising from +11 in the winter to +27 in the second quarter of 2021.

This has been attributed to a fall in expected redundancies – likely due to the extension of the Coronavirus Job Retention Scheme until the end of September – as well as an increase in recruitment activity.

As such, employment optimism has been seen across all sectors including the private sector (+28), the voluntary sector (+28) and the public sector (+22).

In addition to this, the proportion of organisations planning to recruit in the three months to June 2021 has risen to almost two-thirds (64 per cent) – the highest level since February 2020.

Even the worst affected sectors, such as hospitality and retail, have seen a sharp surge in the number of organisations planning to recruit within these industries. Over two-thirds (66 per cent) of hospitality firms plan to recruit in the second quarter of 2021, up from a third (36 per cent) in the first quarter of 2021.

This too has led to a rise in pay award expectations, with this set to increase from 1 per cent to 2 per cent over the next 12 months.

The CIPD suggests that unemployment may be close to its peak due to the reported fall in the supply of overseas workers, especially in the number of EU-born citizens in employment.

However, the CIPD further warns that this could lead to skills or labour shortages which will impact recruitment.

To tackle this, the body states employers will need to attract new and diverse talent, upskill existing staff and create a renewed focus on job quality.

Gerwyn Davies, Senior Labour Market Adviser at the CIPD, the professional body for HR and people development, comments:

More jobs and improved pay prospects should give us all reason to cheer, but a solid jobs recovery must be focused on better jobs, not just more jobs. To offset the emerging threat of recruitment difficulties, employers should be reviewing not just their recruitment practices, but also the quality of work they offer – such as employment conditions, the possibility of promotion, training opportunities and the right balance of flexibility and security. There’s more to good work than raising wages.

By offering better quality jobs, employers will be in a better position to attract and retain the staff they need, particularly in sectors that have traditionally relied on EU workers, the supply of which has fallen sharply. New limits to the supply of unskilled migrant labour and the switch to new ways of working presents many employers with an incentive to review job quality. Now is the optimal time for the HR profession to raise its voice on this issue – both to ease recruitment difficulties and raise productivity.

Davies continues by warning that strong employment growth will likely soften as 2021 continues and questions whether the increase in pay awards will offset the rise in the cost of living, brought about by inflation.


*This data can be found in the CIPD and Adecco’s report ‘Labour Market Outlook: Spring 2021’ .