'˜Fairly bleak' forecast as jobs market set to struggle
The Chartered Institute of Personnel & Development (CIPD) said in its latest annual predictions for the market that the coming year will pose even more challenges than a “turbulent” 2016 for the UK government and businesses.
Looking at the current year, the organisation’s acting chief economist Ian Brinkley said that while the Brexit vote didn’t annihilate the economy in 2016, the fall in sterling’s value and braking inward investment reflect “a clear loss of confidence in international markets”.
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Hide AdOn 2017, he expects slower economic growth, a slight rise in unemployment, fewer new jobs with as little as 100,000 potentially being created, and squeezed salaries, with wages set to fall amid precious few real-terms pay rises and expected higher inflation.
In terms of the gig economy, noted for short-term work and contracts, the CIPD noted that 2016 “was marred by stories of poor employment practices” with Brinkley forecasting continued flexible or “atypical” working, via agency and zero-hours contracts and self-employment.
This is all expected to sit against a backdrop of the UK remaining subdued by low productivity, although this is expected to show some improvement on 2016’s levels due to investments announced in the Autumn Statement.
Brinkley believes that to boost productivity, the government’s new industrial strategy for next year “should focus much more strongly on the workplace and skills”, with 2017 offering “a chance to break from the old narrow focus on a handful of high tech and export sectors that has achieved little to date.
“Our economy is broad; investment in productivity must be too. Until we crack the UK’s productivity problem… it’s unlikely that we will see any improvement to living standards for some time.”
He added the biggest action the government should take is “to give businesses greater certainty over the direction of travel, the residence status of migrants already in the country and the likely extent of restrictions on new flows of migrants.
“Very few employers want a ‘hard’ Brexit and the government must consider this when planning its strategy for both the final arrangement and the transition towards it. We cannot afford for businesses to live in limbo.”