Job optimism has soared to the highest level since the beginning of the pandemic. So much so that UK employers are the most optimistic they have been about hiring since February 2013 – 8 years ago! The net employment intentions balance is positive across all sectors. The net employment intentions balance measures the difference between the proportion of employers expecting to add jobs and those planning to cut jobs. In the second quarter of 2021, it rose to +27, from +11 in the first quarter of 2021. As the net employment intention balance was positive, this means that overall more jobs are being added compared to what has been cut. Job optimism has soared as this figure has risen so sharply.
The proportion of companies planning to recruit in 3 months to June 2021 increased to 64%. This is the highest level since February 2020, highlighting real optimism that the impacts of Covid19 are slowly starting to disperse. In even more positive news, some of the worst affected sectors by the pandemic have strong hiring intentions. This is a step in the right direction with 66% of hospitality companies planning to recruit in the second quarter, which is a huge increase from just 36% in the first quarter. Demand for workers began to grow rapidly in March in both permanent and temporary vacancies as restrictions began to lift across the country.
There has also been increased positivity surrounding pay. Basic pay is expected to increase from 1% to 2% overall in the next 12 months. This is great news as many have struggled financially this last year. However, there is the prospect of higher inflation. This means the increase in pay may not even match the increase in the price of living. Therefore, even though people would be earning more, it may be worth less than before.
Whilst increased jobs and salaries are stepping in the right direction, in order to recover strongly, employers should focus on creating better jobs instead of just more. Employers can review their recruitment process as well as the quality of work that they offer. This includes employment conditions, the possibility of promotions, training and learning opportunities, and the right balance of flexibility and security. If employers consider all of these factors they are likely to be successful in their recruitment. Employers should also have a direct focus on reskilling and upskilling within their workforce.
Redundancies in the second quarter of 2021 have dropped significantly since the first quarter of 2021. In the first quarter, 20% planned to cut jobs in the next three months. It has reduced to 12% in the second quarter.
It is important to understand that these positive impacts will inevitably level off as the impacts of the pandemic this year hit. The UK is currently experiencing a hiring surge as more jobs are becoming available as restrictions are lifted and businesses can reopen. Therefore employers should not become complacent and need to remain committed to building up and improving so that the net employment intentions balance stays high.
With increased jobs and improved pay prospects, we all have a reason to be positive. At HPC we can help to improve your recruitment process. We can aid employers to evaluate their current recruitment process and the work they offer, as well as offer advice on how to improve and hire more effectively.
If you have any concerns or would like to discuss the topics within this article further, please get in contact with the HPC team today.
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