The UK's jobs market has "largely stopped moving" as employment costs are weighing on businesses and hindering jobseekers' entry into work, according to the Chartered Institute of Personnel and Development (CIPD).
Private sector employment intentions are currently at plus 11, marking the lowest level recorded outside of the Covid-19 pandemic. The CIPD, which represents the human resources sector, found that hiring levels among UK firms have weakened, while redundancy levels have not increased.
This situation suggests Britain is in a "low hire, low fire" environment, which the CIPD indicates is becoming the "new normal." James Cockett, CIPD's senior labour market economist, stated that a stagnant market restricts new jobseekers, limits progression for current employees, and diminishes the talent pipeline organisations rely on.
Only 57% of private sector employers intend to hire in the next three months, another joint low outside the pandemic, based on a CIPD survey of over 2,000 businesses. The net employment balance, which measures the difference between employers expecting headcount to rise and those anticipating a fall, remains at plus nine, near its lowest level outside the pandemic.
Despite an overall fall in vacancies, 31% of employers still report hard-to-fill positions. The CIPD suggests this indicates ongoing skills shortages in sectors such as construction, healthcare, and social care.
The CIPD has called for Andy Burnham to reverse increases to employer national insurance contributions (NICs) introduced by former Chancellor Rachel Reeves. They also recommended cancelling the planned abolition of age-based wage levels to help businesses create more entry-level jobs.