An increase in hiring intentions among public sector employers looks set to support further employment growth in the UK, according to the latest Labour Market Outlook report from the CIPD and The Adecco Group.
The quarterly survey shows that, in a reversal of the trend over the past decade, public sector employment growth is expected to increase in line with the private sector for the first time since 2008.
The increase in employment confidence in the public sector coincides with a number of pledges by the new Government to boost investment in public services. Women already account for around two thirds of the public sector workforce, suggesting that increased hiring by public sector employers will further boost the number of women in work.
Overall, the report shows that employer demand for labour remains strong. The report’s net employment score – a measure of employment confidence in the next three months – has remained positive at +22 compared to +21, the previous quarter, with increased employment confidence in the public sector compensating for a fall in the private sector. Net employment intentions in the public sector – the proportion of employers expecting to increase rather than decrease total staffing levels – increased for the second quarter from +14 to +21, while net employment intentions in the private sector fell from +25 to +21.
Other key findings of the report, which is based on a survey of more than 1,000 employers, include:
- Employment confidence has fallen relatively sharply among manufacturing employers, down from +22 to +6.
- Strong public sector employment recovery is broad-based, with public administration, healthcare and education all predicting strong growth
- Overall median basic pay award expectations in the next 12 months remain at 2%, suggesting pay growth is likely to remain consistent with recent trends
Gerwyn Davies, Senior Labour Market Adviser for the CIPD, the professional body for HR and people development, said:
“After more than a decade of contraction and pain, the public sector is now very much part of the good news employment story. The recent recovery in public sector employment is undoubtedly one of the key reasons behind the recent strong gains in the female employment rate, and this looks set to continue in the near to medium term.
“However, we should not lose sight of the net loss of more than 300,000 jobs in the public sector since 2010 and the challenges this has presented public service employers and employees in delivering crucial public services. Public sector organisations must prioritise managing and developing their workforces to empower and motivate existing public service employees, not just increase headcount.”
Alex Fleming, Country Head and President of Staffing and Solutions, the Adecco Group UK and Ireland, said:
“The increase in public sector employment confidence is very positive for our labour market and shows that demand remains strong, despite the recent times of political uncertainty.
The report’s findings also suggest that the number of women in work is likely to continue to rise which is promising, as a strong focus on diversity and inclusion is proven to be highly beneficial to organisations. However, there is still evidence of hard to fill vacancies, with 38% of organisations saying they have been prevented from filling a permanent role in the last 12 months. It’s therefore important that organisations continue to focus on developing and upskilling their employees through training and apprenticeships, to not only help tackle recruitment challenges, but also create a working environment where all talent can develop and thrive.”
In terms of sub-sectors, confidence is highest in healthcare (+28), construction (+27) and the voluntary sector (+23). Meanwhile, net employment intentions among manufacturing employers have fallen from +22 to +6 over the past three months. For the first time in more than a decade, employment intentions across the private, public and voluntary sector have converged with all three sectors showing a net employment intention score between +21 and +23.
Reflecting the current tightness of the labour market, around two-thirds of employers (64%) who have vacancies report that at least some of these vacancies are proving hard to fill. In addition, almost four in ten (38%) employers report being unable to fill a permanent vacancy during the past year, with roles in healthcare, engineering, teaching and IT being the most prevalent. Around a quarter (24%) of all employers have increased investment in skills in the last two years to address hard to fill vacancies. One in five (19%) have offered more apprentices, rising to 29% among public sector employers. This suggests the Apprenticeship Levy may be acting as a catalyst for more activity.
Meanwhile, overall median basic pay award expectations for the next 12 months (to December 2020) remain at 2%, driven by employers matching inflation (43%) and movement in market rates (35%). Other reasons include recruitment and retention pressures (29%) and affordability (28%). Employers only able to offer less than 2% cited affordability (30%), public sector pay restraint (26%) and absorbing labour market costs such as the national minimum wage (21%) as factors inhibiting pay growth.
CIPD Press Enquiries
Helen Ablett / Izzy Uhlig
Press office: 0208 612 6400 / Out of hours: Helen Ablett 07973 167141
The Adecco Group Press Enquiries
Press office: 0203 837 3687 / Out of hours: Micky Izelaar, 07584 050138
Notes to editor
- Gerwyn Davies, Senior Labour Market Adviser and author of the report, is available for interviews
- Media can request interviews or a copy of the Labour Market Outlook report in advance via the CIPD press office email@example.com/ 0208 612 6400
- The report will be available to download from 00.01 on Monday 17th February 2020 at cipd.co.uk/lmo
- The Labour Market Outlookprovides a set of forward-looking labour market indicators, highlighting employers’ recruitment, redundancy and pay intentions. In this latest report, 1,024 UK employers were surveyed by YouGov in December 2019. The figures have been weighted and are representative of UK business by size, sector and industry.
- The latest official public sector employment figures can be found at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/publicsectorpersonnel/bulletins/publicsectoremployment/previousReleases. The report draws on the ‘total UK public sector employment excluding reclassification effects’ measure because it controls for the number of bodies that have moved between the public and private sectors during the past decade e.g. Lloyds Banking Group.
- The last public sector employment figures by gender were published in November 2015 and can be found here: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/publicsectorpersonnel/adhocs/004849publicsectoremploymentbygender
- The CIPD is the professional body for HR and people development. The not-for-profit organisation champions better work and working lives and has been setting the benchmark for excellence in people and organisation development for more than 100 years. It has a community of 150,000 members across the world, provides thought leadership through independent research on the world of work, and offers professional training and accreditation for those working in HR and learning and development. cipd.co.uk
- The Adecco Group UK&I and its brands are part of the Adecco Group, the world’s leading HR solutions partner. As a Group, we provide more than 700,000 people with permanent and flexible employment every day. With more than 34,000 employees in 60 countries – 3,100 in the UK&I – we transform the world of work one job at a time. Our colleagues serve more than 100,000 organisations with the talent, HR services and cutting-edge technology they need to succeed in an ever-changing global economy. As a Fortune Global 500 company, we lead by example, creating shared value that meets social needs while driving business innovation. Our culture of inclusivity, fairness and teamwork empowers individuals and organisations, fuels economies, and builds better societies. We make the future work for everyone.
- The Adecco Group is based in Zurich, Switzerland. Adecco Group AG is registered in Switzerland (ISIN: CH0012138605) and listed on the SIX Swiss Exchange (ADEN). The Group is powered by eight lead brands: Adecco, Modis, Badenoch + Clark, Spring Professional, Lee Hecht Harrison, Pontoon, General Assembly and YOSS.
- The Adecco Group UK&I’s head office is located in London, UK. We have 10 brands, including the Adecco Group UK&I, Adecco, Ajilon, Badenoch + Clark, Modis, Office Angels, Penna, Pontoon, Roevin and Spring Technology.