Scots firms report strongest employment intentions since onset of pandemic

The UK government is being urged to extend the furlough scheme to avoid redundancies, as Scottish companies report the strongest employment intentions since the onset of the pandemic.

The report hails the first cause for optimism across the labour market in Scotland since the outbreak of the pandemic. Picture: Lisa Ferguson.

There are signs that Scotland’s labour market is close to turning a corner, with the first indication since the outbreak of Covid-19 “that there is some cause for optimism,” according to the latest Chartered Institute of Personnel and Development (CIPD)/Adecco Labour Market Outlook out today.

The report’s net employment intentions figure, which measures the difference between the proportion of Scottish employers expecting to add jobs and those planning to cut positions, is at +4, compared to –17 six months ago.

Just under half of Scottish employers said they were looking to recruit in the first quarter of 2021, up from 41 per cent six months ago, with sectors across the UK indicating strong hiring intentions including healthcare (80 per cent), and finance and insurance (65 per cent) – but hospitality came in at just 36 per cent.

The share of companies north of the Border planning to make redundancies in the first three months of this year is down to 10 per cent, compared to 32 per cent six months ago. For the UK as a whole, this fell to 20 per cent from 34 per cent compared with the last quarter.

Those behind the survey said 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.

But the point was also made that the uncertainty of both future restrictions and government support beyond April could “further test business confidence in the medium term”.

The CIPD said it is therefore urging the UK government to extend the furlough scheme until at least the end of June to help support sectors most affected by the restrictions.

Lee Ann Panglea, head of CIPD Scotland and Northern Ireland, said: “This is the first time since the onset of the pandemic that there is some cause for optimism across the labour market in Scotland.”

Relapse

But she added that it is “far too soon” to rule out a relapse of redundancies in the second half if the furlough scheme isn’t extended to the end of June. “It would be disappointing to see the success of the huge level of government support falter at this stage.”

Also commenting was Alex Fleming, region president of Northern Europe at Adecco Workforce Solutions, who said: “The furlough scheme and redeployment have enabled many organisations to avoid redundancies during the pandemic, and as we continue to transition into the new era of work, government support will remain a key factor in helping to minimise any further jobs fallout.

"Investing in reskilling and upskilling will also remain an important tactic in future proofing the workforce… companies that invest in career-development, enhancing the skillsets of employees and maintaining a positive workplace culture will help to strengthen their talent attraction and retention strategies during what remains such an unprecedented time.”

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