Employment costs continue to dampen hiring activity, says the CIPD

Responding to today’s ONS labour market figures, James Cockett, senior labour market economist for the CIPD, the professional body for HR and people development, comments: 

“Today’s figures lay bare just how challenging conditions have become for employers. Overall vacancies have fallen to 700,000, with the level among small employers now 50% lower than the post pandemic peak in 2022. Many employers, and SMEs in particular, are holding back from hiring because of higher labour and wider operating costs.  

“Our forward-looking data shows employer confidence on hiring intentions at a record low and points to more of the same in the months ahead. This highlights the need for Government to work in partnership with employers and take steps to create a more positive business environment that can support jobs and growth.  

“The ONS data continues to highlight the scale of the NEET crisis with the unemployment rate among 16-17-year-olds currently recorded as 34%. Now is the time for bold action to improve access to work and training opportunities for young people. The Milburn Review, expected in the coming weeks, should back the CIPD's call for an Apprenticeship Guarantee for 16 to 17-year-olds. This would help create 20,000 additional apprenticeship places and open more routes into skilled employment. Reversing the reduction in the secondary NICs threshold and putting the equalisation of the adult and youth minimum rates on hold, would also help to address the significant numbers of NEETs by easing cost pressures on employers.  

“Another way the Government can support job creation is by compromising on its proposed reforms to zero- and low-hours contracts to avoid further reducing employment opportunities, particularly for young people. Unless the proposed measures can be made workable, employers won’t respond by moving zero-hours staff onto guaranteed hours, they will simply take on fewer of them.”