More than half of UK employers planning to recruit staff, survey reveals

23 Feb 2021 By Lauren Brown

New findings come as latest official figures show unemployment topped 5 per cent in the run-up to Christmas

More than half of UK employers planned to recruit new staff in the first three months of 2021, a survey has found, which experts have hailed as “the first signs of positive employment prospects in a year”.

Of the 2,000 employers polled for CIPD’s latest Labour Market Outlook, 56 per cent indicated plans to recruit in the first three months of this year, up from 53 per cent in the previous quarter and 49 per cent six months ago.

The news comes as the latest figures from the Office for National Statistics (ONS) show unemployment reached 5.1 per cent in the three months to December last year – the highest for nearly five months.

The ONS figures also revealed there were currently 726,000 fewer people in payrolled employment than before the start of the pandemic, of which nearly three-fifths were under the age of 25.

However, January did see 83,000 more people in payrolled employment than the previous months, the second consecutive month of growth, which the ONS described as “tentative early signs” of the labour market stabilising. 

The ONS data also showed the number of job vacancies in the three months to January was 26 per cent lower than the previous year. However, this is an improvement when compared to summer 2020, when vacancies had dropped by nearly 60 per cent.

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The Labour Market Outlook showed signs redundancies were stalling too, with the number of employers saying they were planning redundancies dropping from 34 per cent in the last quarter to 20 per cent.

Commenting on the ONS figures, Gerwyn Davies, senior labour market analyst at the CIPD, said they were “very good figures for an economy passing through a fragile and uncertain period”.

But even though the economy had shown “tentative signs” that the level of redundancies had fallen from its peak, Davies said it was still concerning that the economy “continued to shed jobs at the turn of the year at a very high rate”.

“Taken in the round, the latest jobs figures indicate that the labour market continues to withstand the pandemic headwinds better than anybody could have expected. However, it remains in a far from healthy state, which underlines further the need for the chancellor to extend the furlough scheme into the summer,” he added.

The government yesterday outlined plans to ease the coronavirus restrictions with the hope of reopening parts of the economy from 12 April – which is later than the current end date of the furlough scheme. However, chancellor Rishi Sunak has said he would outline the next phase of the government’s support package in his budget statement next week (3 March).

James Reed, chairman at Reed, also called for an extension of the furlough scheme. He said: “Thanks to the success of the vaccine rollout, the recovery is expected to accelerate as current restrictions are eased in the coming months. But the government must continue to support employers and workers as we transition back to some sense of normality.”

As well as extending the furlough scheme beyond April, Reed also said more targeted support was needed for groups that had been disproportionately affected by the outbreak, including women and BAME groups. 

“The chancellor’s March budget is an opportunity to begin rebuilding a fairer economy that holds the prime minister to his word that this will be the last lockdown,” he added.

Neil Carberry, chief executive at the Recruitment & Employment Confederation, said the increase in unemployment came as “no surprise” given the difficult winter the economy has had. But he added that the ONS figures did hold “many positive signs”.

“Our own data tells us that employers want to hire new staff in the coming months – with the plan for easing lockdown now in place and firms able to see the path ahead, we should see some of that pent-up demand start to be unleashed as the economy gradually opens,” he said.

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