Firms to add jobs in the new year, finds CBI survey
The survey showed that 45% of businesses across the UK expect to grow their workforce in the year ahead. However, there is a Brexit effect weighing on larger firms: businesses more exposed to the uncertainties posed by Brexit are least optimistic about adding new jobs.
The Brexit effect is visible elsewhere as well. Nearly half of UK businesses (48%) saying that the UK has become a less attractive place to invest and do business over the past five years. In particular, companies are worried about access to skilled workers – 83% say access to skills is the most significant threat to the UK’s labour market competitiveness; three in five firms (59%) see the ability to move UK workers across the EU in future years as a threat.
Over two-thirds of firms surveyed (70%) will be raising pay for their employees in line with, or above, inflation in the coming year, up from 52% in 2017. Over half of all businesses are impacted the rise in the National Living Wage – firms say they will deal with it by trying to raise productivity, reducing profits or raising prices.
Firms are increasingly encouraging a diverse workforce. A majority have also reported they have taken action to increase workforce diversity, by improving progression opportunities (62%), training for line managers (55%) and introducing flexible working opportunities (54%). This has improved staff retention and increased engagement. Nearly all firms are taking action to reduce the gender pay gap (93%) and improve gender diversity at all levels of businesses (50%).
Matthew Fell, CBI chief UK policy director, said: “Britain’s job market is in good health, but this survey also shows a worrying trend that there aren’t enough sufficiently skilled people to fill the number of job vacancies.
“It’s encouraging to see firms across the country investing in training their staff and helping them develop new skills. But this investment alone is not the silver bullet that will meet all our needs. Business and the Government need to plug the skills gap and champion the flexible labour market on which our economic strength relies, to ensure investment continues to flow in.”
He added that while pay growth has started to pick up, household budgets are still squeezed: “It’s great to see many businesses aiming to improve pay levels over the coming year, but they face a range of challenges, including coping with the costs arising from the National Living Wage.
“We welcome the Government’s decision to consult on a new remit for the independent Low Pay Commission (LPC) beyond 2020. It’s important that both the National Minimum Wage and the National Living Wage increase at a pace that boosts living standards and protects jobs. More broadly, the focus should be on increasing productivity, which is the only sustainable way to accelerate wage increases.”