2021. A Labour (market) of love

So, who’s ready for some good news today?

Finally, it seems the UK labour market is on the up again. And about time, too. After almost a year of Covid-19 fuelled redundancies and staff being furloughed, things are taking a turn for the better. Hallelujah, screamed every business owner and HR department across the country – never mind the wide-reaching talent out there, many of which have been forced into biding their time for months now while the dire situation improved.

So, what’s happened specifically to shape the turn-around this year? And are things genuinely on the up or, at this stage, do we only suspect they are? It’s time to take a closer look at the labour market and find out what’s happening.

First things first, let’s talk furlough – or the Coronavirus Job Retention Scheme – which the Government brought into play quickly after the virus began wreaking its havoc last March, ensuring a wage for employees even where no actual ‘work’ was available to them. This has certainly helped to keep unemployment figures from sky-rocketing north, not to mention businesses and families from financial ruin. Great news, then, to hear the UK Chancellor, Rishi Sunak, was extending the scheme for a further period this year to continue providing the lifeline many across the country are still heavily reliant on.

While furlough allowed business owners to retain their staff at a cost they could afford, this did leave very few going out to market for additional staff. That’s asides from the sectors (or roles within sectors) where unprecedented growth occurred, of course – supermarket workers, retail store delivery drivers, and health or care workers. But in more good news this month, it appears this situation is now in reverse as companies begin to open up their recruitment once more, in search of talent to support their growth.

At least, that is the case according to a recent survey conducted by our professional body the CIPD, who asked 2,000 of its member base about their recruitment plans for 2021. While it’s worth taking a look at the study in full, here is what the CIPD found, in summary.

Companies intend to increase staff this year - not reduce staff. The gap between the two camps rose by +11% in favour of those intending to hire, according to the CIPD’s survey. What’s more, over half of the employers surveyed said they were looking to hire during Q1, 2021. 56%, to be exact, which in itself is an incredible 53% increase on the previous quarter figures (and 49% on the one prior which reports on figures six months ago). All sounds promising to us.

Planned redundancies are on the decline. Quarter on quarter, employers who have planned to make redundancies has reduced from 30% to 20%. Again, this can give everyone currently in employment a real confidence boost to kick off their new year.

Healthcare continues to lead the way on recruitment this year. While multiple sectors are reporting an increased number of new hires this quarter, it’s no surprise to see healthcare in the number one spot with 80% of employers in this sector saying they intend to hire. Next comes the Information and Communications sector at 67%, followed closely by the Education sector alongside Finance and Insurance, both on 65%.

Hospitality continues to suffer this quarter. No real news here, to be fair, with the sector being among the toughest hit since March 2020 set to continue its lockdown measures for a longer period than others this year. What’s more, just over a quarter of the survey’s employers admitted to having plans for further headcount reductions this year.

So, it appears things are improving across the landscape asides from those areas we would expect the struggle to continue, such as hospitality. Worth bearing in mind, of course, the recently-announced lifting of lockdown restrictions across the UK beginning March 8, with bars and restaurants set to open from April 12.

Overall, employment numbers for the UK remain down against the same time last year, which is no surprise considering it was a month before the pandemic began. Still, to be seeing this amount of confidence on the rise – and not just climbing but abounding the upward trajectory – is something to give the entire nation some hope, not least those who have found themselves without work since March last year.

For professional advice on recruiting your new hires this year, or to arrange a virtual coffee and a chat, contact our 121 team on 01904 769142.