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Employment likely to grow in 2013, say CIPD

Employment will continue to grow in 2013 despite the pattern of muted economic growth, say the Chartered Institute of Personnel and Development.

The annual ‘Barometer’ labour market report from the CIPD, highlights the “mystifying” trend of stunted economic growth and increasing employment, but suggests on balance, employment growth is likely.

Chief economist at the CIPD, Mark Beatson, said: “On balance, there are likely to be further increases in employment. Rising employment alongside muted growth indicates that employers have significant reserves of skilled labour capacity on which to call to support growth.

“That cannot be sustained forever, so knocks to business confidence could force reductions in capacity that employers have seemed keen to avoid to date. Equally, the spare capacity in the economy could mean a return to growth but accompanied by slower employment growth than we saw in 2012 as employers draw on the labour reserves they have built up.

“Whatever happens, it seems certain that the squeeze on employees’ living standards caused by average earnings going up by less than prices will continue into a fourth consecutive year. We also think the OBR may be proved pessimistic in its prediction that it will take until well into 2015 before employment hits the landmark figure of 30 million.

“Employers are proving adept at maximising the potential of the UK’s flexible market, leading us to conclude that the government may be able to celebrate 30 million employed before the next election.”

The CIPD attribute the unusual growth in employment over the year to persistent, below-inflation growth in pay; employers hanging on to skilled workers more than they have in previous downturns; and job seeking “efficiency” among the overall supply of labour.

They suggest that focus on underemployment from some commentators seemed “overplayed” and indicated that growth in employment was also accompanied by a 2.6% increase in the total number of hours worked.

This was posted in Bdaily's Members' News section by Tom Keighley .