A new report by the CIPD offers an optimistic glimpse at the labour market with employment recovery hitting the highest level since records began. 

New research carried out by the Chartered Institute of Personnel and Development (CIPD) indicates a strong recovery in the labour market as the year has progressed.

Specifically, the net employment balance – which measures the gap between the number of employers who want to increase and decrease staff levels – has risen for the fourth consecutive quarter.

In addition to this, since the previous quarter, this gap has increased by +5 points to hit +32 – the highest levels since tracking began.

The net employment balance remains positive for all industries but is particularly high in healthcare (+58), hospitality/arts/entertainment (+48) and IT (+41).

This improvement has been seen through the drive in recruitment with over two-thirds of businesses (69 per cent) planning to recruit in the three months to September 2021.

This trend also offsets the number of employers who are planning to make redundancies which is around only 13 per cent. Compared to the previous summer, when this figure stood as high as 33 per cent, the impact of the pandemic on the labour market is starting to lessen slowly.

The CIPD has suggested that these figures mean the end of furlough will be a “relatively smooth transition with minimum job losses”.

Despite this, the recovery has not taken place equally with certain sectors now finding it harder to recruit than others. This is despite the same sectors being some of the hardest hit during the pandemic.

Over half (51 per cent) of employers within hospitality, arts and the entertainment industry now report hard-to-fill vacancies compared to over a third of employers within other sectors (39 per cent). As such, these industries are also the least likely to report making redundancies currently.

This contrasts against industries such as finance and insurance and manufacturing which have both showed redundancy intentions of around a quarter.

Employers plan to alleviate hard-to-fill redundancies through upskilling more existing staff (44 per cent), hiring more apprentices (26 per cent) and raising wages (23 per cent).

Jonathan Boys, CIPD Labour Market Economist, stated:

The Bank of England is expecting the economy to be back to its pre-pandemic size by the end of this year.

The expectations of employers for the following three months as laid out in this report confirm these forecasts. Employers expect a swift summer reopening and return to normality.

Anxiety about mass job losses has been replaced with the opposite fear for employers – namely, an inability to recruit enough of the right staff.

The median employers’ expectation of basic pay settlements has held at the 2 per cent level reached last quarter, after four consecutive quarters at 1 per cent. Some sectors could see higher figures still if recruitment difficulties persist.


*All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,042 senior HR professionals and decision-makers in the UK. Fieldwork was undertaken between 16 June and 12 July 2021. The survey was carried out online. This research is outlined in the CIPD’s new report “Labour Market Outlook: Summer 2021.”