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CIPD - The new government is met with a cooling jobs market with persistent wage growth
The new government’s plans for growth hinge on a strong labour market but challenges of economic inactivity remain
Responding to yesterday’s ONS labour market figures, James Cockett, labour market economist for the CIPD, the professional body for HR and people development, comments:
“The main story is the continued cooling of the labour market. Vacancies have now fallen every month for the last two years. However, with employment falling and unemployment edging up it’s important the government consults with employers on its plans to strengthen employment rights, to ensure any changes don't undermine the flexibility of the labour market and employment opportunities for workers.
“Pay is the exception to the cooling labour market and wage increase expectations remain stubbornly high at just below 6%. Expectations were that nominal pay would fall in line with falling inflation, which now stands at 2%. Instead, the level of pay growth has been largely unchanged in the last six months.
“The King’s Speech on Wednesday highlighted the government’s intention to reform the apprenticeship levy as it seeks to maximise the potential of the UK workforce. A more flexible Growth and Skills Levy can help employers train their own staff to tackle skills gaps and shortages so they are less likely to have to pay a premium for new recruits.
“High levels of inactivity in the labour market also remains a headache. There needs to be a joined up approach from the government to tackling this issue, including the provision of occupational health support for SMEs.”
