Employer confidence hits record levels, CIPD research finds

16 Aug 2021 By Caitlin Powell

Although study reveals recruitment intentions are up, experts warn the upcoming end to the furlough scheme may see businesses experiencing staff shortages 

Employer confidence has reached a record high, official figures published today (16 August) have shown, but there are still concerns about what will happen after the government furlough scheme ends. 

The latest Labour Market Outlook from the CIPD, which polled more than 2,000 senior HR professionals and decision-makers in the UK, found that firms showed strong employment intentions in the third quarter of this year as confidence hit a nine-year high. 

The CIPD’s net employment intentions balance – which subtracts the percentage of employees planning to downsize their workforce from the percentage planning to increase their workforce – rose to +32 in the third quarter. 

This was up from +27 last quarter and, according to the CIPD, was the strongest employer intentions figure seen since tracking began in winter 2012/13. 

Research also showed that the composition of the net employment balance saw a rise in firms intending to expand their total staff, as two in five (40 per cent) indicated they were looking to increase their employees. 

The report also found that recruitment intentions have dramatically increased as more than two-thirds (69 per cent) of employers planned to recruit in the three months to September 2021 – a noticeable rise from 64 per cent in the last quarter and 49 per cent this time last year.

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

Employers in the hospitality, arts and entertainment sector have seen their recruitment intentions nearly triple since last year, with nearly three-quarters (72 per cent) indicating that they were looking to hire in summer 2021, compared to just over a quarter (26 per cent) in summer 2020. 

Transport and storage recruitment intentions have also nearly doubled, from a third (33 per cent) in summer 2020 to nearly two-thirds (65 per cent) of employers looking to hire in 2021. 

The CIPD suggested that both of these sectors were impacted by the coronavirus pandemic and changes to immigration as a result of Brexit and so, as a result, they were suffering from widely reported labour shortages.

Reacting to the figures, Jonathan Boys, labour market economist at the CIPD, said that while the data was incredibly strong compared to last year, the end of the furlough scheme meant employers would not be able to expand and contract their staffing levels at minimum cost which they have been enjoying as a form of flexibility provided by the scheme. 

“This will no longer be a viable strategy as the scheme winds down, so we’ll see recruitment and retention pick up the slack as employers look to plug any gaps in their workforce,” he warned. 

“With difficulty finding labour in some sectors, employers will need to think more long term about how they meet skills needs. It’s important for organisations to look carefully at their recruitment and retention strategies and consider where they need to develop these,” he explained, and suggested one consideration might be increasing investment in training and reskilling. 

Retention strategies should be built with boosting job quality in mind, he also added, as employers have a “huge role to play” in improving working lives.

When asked how employers with hard-to-fill vacancies will deal with this, the report found that more than two in five (44 per cent) said they would upskill existing staff. In addition, a quarter (26 per cent) said they would hire more apprentices and 23 per cent said they would raise wages. 

The research also noted that more than four in five (81 per cent) of employers are planning a pay review in the 12 months to June 2022. Among these employers, a third (33 per cent) expect a pay increase; 12 per cent expect a pay freeze; and just 1 per cent expect a pay decrease. 

HR Assistant

HR Assistant

Manchester, Greater Manchester

£24,087 pa rising to £28,429 pa after four years' service.

Union of Shop, Distributive and Allied Workers (Usdaw)

Assistant Director - National Engagement Service

Assistant Director - National Engagement Service


Circa £65,000

NHS Confederation

Chief People Officer

Chief People Officer

West Yorkshire, North West

£88k-£96k plus 8% PRP.

Dixons Academies Trust

View More Jobs

Explore related articles