POSTED: February 22 2016
Slowing employment growth boosted by self-employed as pay remains stuck

Slowing employment growth boosted by self-employed as pay remains stuck

Commenting on the recent ONS Labour Market Statistics, Gerwyn Davies, Labour Market Adviser at the CIPD, the professional body for HR and people development, says: “…employment continues to make a full recovery. A sharp quarterly rise of over 200,000 in the number of people in work, combined with another fall in joblessness against the backdrop of a slowing economy, is impressive. However, half of the employment increase comes from the self-employed, while the monthly figures suggest that growth may be slowing. The supply of EU migrants into the UK labour market is also starting to plateau, so employers will need to think carefully about how they are going to fill skills gaps in the coming months and this must start with greater investment in workforce skills.

“…we’re still a long way off from the 3% pay increases that were expected. We know that a significant proportion of employers are reporting inflation and increases in employment costs as reasons why they are limiting pay rises. With more people in work, the wage bill is being stretched – looking ahead, these costs will only increase so businesses need to look at ways to boost productivity and innovation in order to support the swelling workforce.

“The case for improved productivity is made even more pressing by the sharp in increase in the number of hours worked by employees. With more people in work and working more hours, there is an urgent need for employers to raise their productivity ambitions. Employers need to focus on the quality of people in work, not just the quantity by upskilling existing staff and upgrading the skill content of jobs to help attract new recruits; especially with conditions remaining so favourable for firms to invest in training and development.

“The Government also needs to play its part, especially through targeted support for SMEs and campaigns to improve people management and development practice on the ground; which evidence consistently suggests remains a drag on UK productivity.”

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