UK labour market on the rise, finds employment study

The UK has started adding more and more permanent jobs, cementing the recovery. The country still faces issues engaging those aged 16-24, research by Accenture shows, although business sentiment towards this group remains strong. Engaging staff remains one of the key priorities for businesses seeking to retain staff, drivers include helping staff see their contribution, development, and pay and employment conditions.

Accenture and the CBI have again come together this year to release the 18th edition of the ‘The Path Ahead: CBI/Accenture Employment Trends Survey’. This year’s edition is more upbeat about employment in the UK, finding that the overall numbers are up and are expected to increase further in the coming year. The survey involved 342 respondents, employing more than 955,000 people.

Big picture
The unemployment rate in the UK has almost reached levels last seen in 2008, at just over 5% of the workforce. This is considerably better than almost all of the developed economies considered, with only Germany out ahead at 5%. France is trending at around 10%, while Ireland – which has seen significant improvement over the past two years – comes in at around 11%. Spain has by far the highest unemployment rate at 25%.

The participation rate in the UK has trended up, while the unemployment figures have decreased, suggesting more people are re-entering the labour market. Germany still outperforms the UK in participation at around 74%. The lowest participation rates are booked in Space and Italy, with only 56% of their respective working age population taking part in the market.

Adding jobs
In the past year, the number of employees in the UK rose by 435,000, whereas the number of people choosing to work for themselves rose by 30,000. One positive factor about the additional positions created is that 72% of them are full-time positions, suggesting that the recovery is embedded and the operating environment much improved.

The area of the economy that saw the largest creation of new jobs is the professional, scientific & technical sector which added 93,000 jobs. Firms in the accommodation & food services sector added a further 76,000 jobs. Manufacturing, while adding 41,000 new jobs this year, is still behind the numbers seen before the crisis. The largest losers this year are the human health & social work, dropping by -14,000 jobs, agriculture, forestry & fishing, dropping -41,000 and public admin & defence, which fell -46,000.

Permanent positions
The survey further discloses that more and more employers are looking to increase recruitment for permanent positions. This is the third year in a row that such increases are on the cards. However, 2015 does reveal a decrease over previous years.

In 2015, 40% of the respondents planned higher levels of recruitment of permanent employees across all or some parts of their organisation. Only 12% suggested lower levels of permanent recruitment and 8% said there would be no recruitment. For 2016, 35% plan to increase their permanent recruitment, while 11% say that their permanent recruitment activity will decrease and 19% state that there will be no recruitment this year. Encouragingly, the survey finds 62% of businesses expect to have entry-level roles suitable for young people aged 16-24.

Young and employed
The crisis, while cutting across generations, has hit the younger generation hardest. Many graduates face uncertain futures with large debts from education and little prospect on the labour market. One positive trend therefore is that businesses are continuing to increase their demand for those aged 16-24. This year, 63% of all businesses are seeking to take advantage of this group, with particularly (93%) large organisations opening their doors. The level of demand has decreased somewhat over previous years however, down from 73% of organisations expecting to have roles for young people available in 2014, and 81% in 2013. It is particularly SMEs that have turned away from this group in recent years. Among businesses in the broad services sector (retail & hospitality, transport & distribution, and other services), over half (60%) expect to have vacancies in the next 12 months suitable for young people. The proportion is higher among manufacturing respondents (at 77%).

Other areas affecting young people, expected to see increased demand, are apprenticeships. 25% of businesses plan to increase recruitment and 6% planning to reduce it, leaving a positive balance of 19% looking to recruit over the next year. Graduate positions are also set to rise, though at a slower rate than last year. 22% of firms are set to increase graduate recruitment, with 6% planning to cut back, leaving a positive balance of 16%.

Staff engagement
One area of concern that businesses face is helping their staff be engaged with their business priorities. Engagement has major benefits to business outcomes according to different respondents, including increased retention (cited by 46%), higher levels of wellbeing (35%) and improved productivity and performance (31%).

Keeping staff engaged can be attained through a number of levers. Some of these are business independent, whilst others depend on the way businesses treat their staff. The key for an engaged workforce is personal interest in the work (46%). Helping employees recognise their work as meaningful, contributing to a bigger purpose and as part of a team, is therefore of major importance. To achieve this, communication and leadership skills in line with management need to be effective – as cited by 39% of respondents. Personal development too is highly rated by respondents, at 29%. Pay comes in at sixth spot, although it highlights that business practices need to be considered in the effective engagement of staff.