Report shows cautious optimism about jobs situation

The immediate jobs outlook has turned positive for the first time in more than a year, driven largely by a decrease in redundancy intentions, according to the latest Chartered Institute of Personnel and Development (CIPD)’s quarterly Labour Market Outlook survey.
 

The immediate jobs outlook has turned positive for the first time in more than a year, driven largely by a decrease in redundancy intentions, according to the latest Chartered Institute of Personnel and Development (CIPD)’s quarterly Labour Market Outlook survey.
 
The survey of more than 1,000 employers, conducted by YouGov, shows the  number of employers intending to increase staffing levels now outbalances those who intend to decreasethem – and is the first positive figure for more than a year.

However, the institute warns that optimism should be tempered by employers’ continued caution about the medium term, which taken together with recent weak economic data, suggests a high risk that many employers may find it necessary to reassess staffing levels before the year is out.

The Labour Market Outlook Spring 2012 report shows that improving overall employment prospects are being driven more by a fall in redundancy intentions in the public and private sectors than a rise in recruitment intentions, with the private sector driving much of the upturn. The picture for the public sector is the least negative for over a year.

The continuing pressure that employers face to cut costs is evidenced by an increase in the proportion of organisations that are intending to offshore jobs to other parts of the world in the 12 months to March 2013, from 6 per cent to 8 per cent. Eight out of ten (79%) employers cite cost cutting as the main reason for offshoring jobs.

However, the survey also highlights the potential risks of offshoring, with more than a quarter (26%) of employers that have offshored jobs overseas now looking to relocate operations back to the UK.

Gerwyn Davies, Public Policy Adviser at the CIPD, said: "The jobs market is desperately seeking good news, so this latest set of positive figures is very welcome. However, any short-term jobs recovery may not be sustained because of the zigzagging economic backdrop. News of a double-dip recession may cause some employers to reassess current staffing levels, especially while labour costs are rising and productivity is falling. The current economic situation facing recruiters looks unusually difficult to read, which may lead to swings in confidence for the rest of the year. Overall, this may suggest greater volatility in the labour market during 2012 compared to the slow, gradual rise in unemployment recorded during the past year."

"The continuing pressure on employers to cut costs is highlighted by the increase in employer intentions to offshore UK jobs to other parts of the world. However, the survey also highlights the dangers facing employers that focus too narrowly on costs at the expense of quality when offshoring, with around a quarter of employers now planning to relocate jobs back to the UK. Employers need to weigh up the wider impacts when considering offshoring decisions, such as the potential adverse impact on customer service or employer brand."

The report also finds that almost two thirds (65%) of employers plan to hire employees in the second quarter of 2012. Hiring intentions are strongest in the finance, insurance and real estate sector (74%) and the voluntary and not-for-profit sectors (77%).

The manufacturing and production (13%) and consultancy services (17%) sectors are most likely to offshore jobs, with India (52%) and Eastern Europe (25%) remaining the most popular destinations.

Of those who intend to offshore jobs, 41 per cent reported that these would be in IT support and 29 per cent in productions / operations. Finance and accounts (23%), call centres (21%) and HR (21%) are other popular functions employers plan to offshore, says the report.





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