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Employer optimism on pay and hiring in first quarter 

Jon Boys

Not only is employment at a record high but the increase in jobs is largely driven by full-time roles. This is good news for jobseekers. Contributor Jon Boys, labour market economist – CIPD.

Today’s official data takes us up until the end of 2018. However, the CIPD’s more recent data suggests that employers expect that both employment and wage growth will stay strong throughout the first quarter of 2019. 

Nominal wage growth is being driven by the demand for skills. With low inflation expected to continue for most of the year we can expect a real terms pay rise for many in 2019.

For now, most employers remain optimistic about their ability to take on new staff but with Brexit just a matter of weeks away it’s uncertain how the mood will change after March. To prepare for this, it’s vital that employers plan for a number of possible scenarios for their workforce. 

While there’s optimism around hiring, access to skills continues to be a challenge for employers. With fewer EU nationals working in the UK as the same time last year, it’s vital that the Government recognises the need for a flexible post Brexit migration system to avoid worsening skill and labour shortages.

The latest results show that the proportion of hiring employers with hard-to-fill vacancies has edged higher yet again, prompting more than half of those facing increasing difficulties to raise salaries to attract potential applicants. Organisations are also finding it hard to retain staff, with official statistics providing concurrent evidence that job-to-job moves are on the rise.

This quarter sees the first rise in basic pay expectations for the private sector since 2012. However, growth for the public sector has slowed, reopening the gap between the two. Should this continue, it could hold resourcing implications for the public sector over the longer term.

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