Employers have made fewer redundancies than expected since the end of the furlough scheme, according to research by the CIPD.

This season’s Labour Market Outlook says only 10 percent of employers expect to make redundancies, which is down from 13 percent last quarter. 

In fact, more companies say they have plans to hire than fire, despite the end of the Coronavirus Job Retention Scheme (CJRS) in September. 

Among the private sector, plans to recruit have also improved to 68 percent from 65 percent over the past three months. 

In contrast, employers that intend to hire in the voluntary sector for the fourth quarter of 2021, fell from 72 percent to 68 percent. 

Recruitment intentions remain unchanged in the public sector (83 percent).

Recruitment Difficulties

However, 46 percent of employers say they are finding it difficult to recruit and expect this to worsen over the next six months.

This means that employers are competing to recruit the best workers, using a variety of tactics. This includes raising wages, upskilling, increasing apprenticeships and improving job quality. 

Around 38 percent of firms said they restricted raising wages to the hard-to-fill roles only, but more than 60 percent of employers said they have extended higher wages to other staff.

The report also found that median basic pay in the private sector could rise from 2.2 percent to 2.5 percent.

Gerwyn Davies, CIPD Senior Labour Market Adviser said: “Overall, therefore, the report’s findings suggest that the jobs recovery is strengthening, which is having a positive ripple effect on pay for some workers in the private sector.”

He added: “On the downside, the survey findings confirm the reported fall in labour supply, which could potentially act as a brake on employment growth in the near term.”

Pay rises to increase in 2022

In 2022, 84 percent of employers are planning a pay review, and one in four expect basic pay to increase.

However, the report warns that caution should be applied interpreting its data because the fieldwork took place before the Chancellor’s more recent announcement that public sector workers will see pay rises over the next three years.

The industries with the hardest to fill vacancies are construction (63 percent), healthcare (59 percent) and public administration and defence (52 percent). Education is at 49 percent.