UK employers have reported their strongest employment intentions in a year according to the latest CIPD/Adecco Labour Market Outlook report.
The report of 2,000 surveyed employers, found that over half (56%) of the respondents indicated they are looking to recruit in the first quarter of 2021, rising from 53% the previous quarter.
Sectors that are indicating “strong hiring intentions” include healthcare (80%), finance and insurance (65%), education (65%) and information and communications (67%). However, the CIPD stated that this optimism “does not extend” to sectors that continue to be affected by the social distancing measures, such as hospitality (36%).
Additionally, the report revealed that the share of organisations planning to make redundancies in the first quarter has fallen from 30% to 20% compared with the last quarter.
In the private sector, companies signalled more “willingness to maintain their workforce”, with the number of employers saying they are planning redundancies dropping from 34% to 20%.
However, around a quarter (27%) of companies surveyed in the hospitality sector indicated they are prepared to reduce their headcount further in the first quarter.
CIPD has estimated that employer confidence may be increasing due to a combination of factors, including the Brexit free trade agreement, the extension of the Coronavirus Job Retention Scheme to the end of April and the anticipation of economic recovery later this year.
Gerwyn Davies, senior labour market adviser at the CIPD, said: “These are the first signs of positive employment prospects that we’ve seen in a year. Our findings suggest that unemployment may be close to peak and may even undershoot official forecasts, especially given the reported fall in the supply of overseas workers.
“However, it is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme to the end of June or if the economy suffers any additional unexpected shocks.”