Employment growth set to continue across the UK, report suggests

While the overall level of employment is set to grow across the UK within the next year, real wages are very likely to fall for a good number of employees, data from the latest quarterly CIPD/Adecco Group Labour Market Outlook has been able to suggest.

Statistical figures revealed that the net employment balance, while remaining in positive territory at +22, based on the difference between the share of employers expanding their workforce and the share of employers reducing their workforce, has shown a slight negative decline from the previous quarter’s figure of +27.

At the same time, real wages look set to fall during 2017 as, for the second quarter running, employers anticipate median basic pay settlements of just 1.1% for the 12 months ahead, against a backdrop of anticipated higher inflation.

Commenting on the findings, Gerwyn Davies, Labour Market Analyst at the CIPD, the professional body for HR and people development, said:

“The report points to the UK economy beginning to face some likely headwinds following the UK’s decision to leave the European Union. The impact of potential restrictions to migrant labour will certainly be exacerbated by the fall we’re seeing in business investment intentions.

Given the current level of uncertainty and the projected increases in costs as a result of a weaker pound, it’s not surprising that employers aren’t currently persuaded to respond to likely controls on migration by investing more in skills. However, this will put further pressure on the UK’s productivity growth potential, which is critical to employers’ ability to afford more generous pay increases.”

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