Jobs upturn springs into life

A new quarterly monitor of employment intentions, published today by the Chartered Institute of Personnel and Development, shows that nearly two in five employers expect to be employing more staff this year. Yet, despite this, few anticipate a significant rise in wage costs. This positive news on the state of the jobs market comes ahead of official employment and pay figures due to be released later this week on Friday 16 April.

The CIPDís first quarterly HR Trends and Indicators survey - involving almost 2,000 employees in all sectors and regions of the UK - finds that more than half (53%) of employers plan to recruit this Spring. Recruitment intentions are strongest in the finance and public administration sectors. However, almost a third (32%) of manufacturing employers expect to cut staff numbers by 5% or more.

Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development and author of the report comments, The expectation of strengthening economic recovery in 2004 is clearly making many organisations more optimistic about job prospects. These quarterly survey figures remain consistent with the CIPDís current expectation that total UK employment levels will rise by around a quarter of a million this year. However, manufacturing is a major exception, though job losses in the sector are consistent with recovery as employers restructure to boost competitiveness.

The survey testifies to Philpottís 3Rs phenomenon of the economy in which reorganising, recruitment and redundancies happen simultaneously within the same organisations. Nearly a quarter of employers plan to lay off staff this spring. Philpott puts this relatively high figure down to the fact that the average organisation restructures every three years whatever the economic conditions. This point is illustrated by the main reasons given for making redundancies - which include reorganising work methods (31%) and competitiveness, efficiency and cost reduction (21%). Only 2% cite relocation of staff overseas, with just 6% pointing to merger activity.

Philpott continues, In a tight labour market with relatively low unemployment, increased wage pressure could potentially hamper the ability of organisations to recruit. It is therefore encouraging that few employers expect a significant increase in wage costs.

Other key findings:

* A higher proportion of public sector organisations (63%) expect to face recruitment difficulties in the next quarter than private sector companies (43%).

* More than a third of organisations expect to have difficulty with recruiting professionals (34%) and skilled tradespersons (18%). Only 1.6% of organisations expect to face problems with recruiting graduates.

* Nearly a quarter of employers intend to make redundancies in Spring 2004. The East of England (28%) and the West Midlands (26%) are the worst affected regions, while almost a third of manufacturers expect their numbers to fall by 5% or more this Spring. The intention is more prevalent in the private sector (24%) than in the public sector (17%).

* A clear majority of employers say that their wage costs will either remain stable or rise by no more than 2% this year. A slightly higher proportion of public sector than private sector employers expect their wage costs to rise in Spring 2004, with nearly one in five public sector employers expecting wage costs to increase by 3-5%.

* Absence management, recruitment and retention are the three most important challenges facing HR over the next three months. The current skills shortage came out fourth. Very few consider pensions (9%) or discrimination (8%) to be a concern.

* Two thirds (66%) of UK organisations increased their staffing levels during the preceding three months to February 2004.