21 December 2017 | By Elliot Mason Insight

Working together

The latest CBI/ Pertemps Network Group Employment Trends Survey offers a snapshot of how businesses are reacting in the current climate

As one eventful year comes to an end, and businesses ready themselves to face the next, many companies remain confident that they can grow their workforce. But firms of all sizes are also looking to their people to help them take advantage of the opportunities and overcome the challenges that arise from current political, economic, and technological trends.

In the CBI’s latest Employment Trends Survey 51 per cent of companies expect to add to their workforce in the year ahead. Confidence is most prominent amongst small-and-medium sized enterprises. 

But while the balance of firms expecting to increase permanent positions in the coming year looks healthy at +35 per cent, and intentions for graduate and temporary recruitment are on trend, it is apprenticeship numbers that catch the eye.

In this year’s survey a balance of +42 per cent of UK firms expect to increase the number of apprentices in their organisations – a notable increase from our 2016 results. This sharp jump indicates that there is a great deal of business appetite for apprenticeships. But it also is likely to represent a bounce back from a significant drop in new apprenticeships this year as firms struggled with the design and delivery of the apprenticeship levy. Recent starts data from the Department of Education revealed a worrying fall of 61 per cent over the summer. A recovery, as firms become accustomed to the levy is no surprise, therefore, and the survey offers a clear signal that there is a readiness amongst firms to invest if design issues are resolved.

There is also some positive news on pay with over half of firms expecting to raise pay next year in line with or above the rate of inflation – despite the rising rate of inflation this year and increased difficulty of doing so in the current economic climate.

And it’s in this respect that a less positive picture is emerging, related to Brexit and skills shortages: there is a softening of business confidence in the attractiveness of the UK labour market as a place to invest and employ people. The survey finds that 63 per cent of respondents expect the UK to be a less attractive place to employ people and invest in the next five years, up from 50 per cent last year and 25 per cent in 2015. Concerns are clearly growing.

In particular, skills gaps and access to talent, both domestic and from abroad, are on business minds when thinking about threats to the future labour market. But business’ concerns cannot be completely attributed to Brexit as there are many other domestic issues weighing on business minds at present, such as the quickly rising National Living Wage which our survey highlights is affecting an increasing number of firms as it rises quicker than average pay.

The focus on engagement

To counteract these pressures – and for another consecutive year – the ETS results showcase the many benefits businesses get from engaged employees, diverse workforces, and inclusive workplace practices. The survey shows that effective line management is the most important driver of employee engagement – followed by offering progression routes through the organisation and the sharing of company-wide values. Achieving an engaged and diverse workforce can make firms more productive, resilient, and attractive as a place to work. Many firms are taking steps towards these goals but there are still too many that are not.

With an increasing number of survey respondents identifying access to skills and people as key concerns for the future, it is becoming increasingly important that businesses are working hard to create the environment, and equip their workforce with the tools, that can enable them to do their best work.

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