By Daniel Hunter

The trend of cautious private sector hiring caused by the flexibility of the UK labour market is likely to persist for the next six months, a survey by the CBI and recruitment specialists Harvey Nash reveals today (Monday).

Seeking a competitive edge, the latest CBI/Harvey Nash Employment Trends Survey, also sets out how tackling unemployment requires renewed focus from the Government and employers to ensure that more of our young people are positioned to get the jobs that the economy is creating — which are mainly skilled.

The survey covered 300 companies, employing around 1.4 million people in the UK.

“The performance of our flexible labour market in generating jobs in a sluggish economy is a mini-miracle," Katja Hall, CBI Chief Policy Director said.

"Businesses look set to continue with the positive but cautious approach to hiring that we’ve seen over the past couple of years, and this is echoed in expected pay restraint designed to protect employment.

“While the jobs figures tell a promising story, too many young people from disadvantaged backgrounds are not getting jobs because — as the survey shows — job creation at a skilled level requires skills and attitudes which we do not help them to develop. Worryingly, nearly six in ten employers identify a lack of aspiration and role models as major obstacles to young people’s success.

“The challenge for the Government and businesses is to ensure that barriers to employment can be overcome. Progress will require action on education and training, from early years right up to development in the workplace. While businesses are already active in this area, providing work experience and partnering with local schools, there is more to be done if we are to tackle the gap in aspiration and opportunities facing some young people.”

The private sector is creating jobs. The survey shows that 35% of businesses expect their workforce to be larger in 12 months’ time, and 15% predict they will be smaller, giving a balance of +20%.

The survey shows that 48% of businesses expect their workforce to be larger in 12 months’ time and 13% predict they will be smaller, giving a balance of +35%.

The survey shows that 36% of firms plan a pay increase either below RPI or targeted on specific employees, 16% are planning a pay freeze.

59% of employers identified a lack of understanding of workplace behaviours as a barrier, and 59% of businesses think a lack of basic numeracy/literacy skills is holding people back. 57% of employers identified a lack of aspiration and 53% of businesses perceive a lack of role models to be preventing young people from disadvantaged backgrounds fulfilling their potential.

“The hiring picture presented in the report overall remains a positive one, as businesses look for the best people in tough times," Albert Ellis, Chief Executive of Harvey Nash said.

“Companies are looking for new recruits with advanced technical skills and, in the coming months, candidates well-suited to the knowledge economy, with experience in science and IT, and those with professional backgrounds, will be most in demand. This optimism reflects the growth prospects in these sectors, but competition is fierce and is only set to increase in our globalised economy.

“To gain a competitive edge, businesses are investing in and nurturing talent. Most encouragingly, more than a fifth of employers are looking to increase their graduate hiring in the next year and 23% are set to boost apprenticeship numbers, thereby investing in the skills of the next generation. This is also good news for those seeking out a first foothold on the career ladder, but the survey shows a lack of skills and experience is holding back some from fulfilling their potential.”

Three-quarters (76%) of businesses identifying a driver for increasing gender diversity said it was the need to access the broadest talent pools, while 62% of employers say their initiatives were driven by the culture of the company. Just 2% said their motivation was the threat of quotas at national or EU level.

On gender diversity in the workplace, Ms Hall said: “Encouragingly, we are seeing action on gender diversity driven by talent, not tokenism. For three-quarters of firms taking action on gender diversity, their aim is to access the broadest talent pools, and in six-out-of-ten businesses, initiatives are driven by the culture of the company. This kind of business-led approach, tailored to the needs of each firm, will be the best way to boost diversity right to the top of the company — factors which no legislation can change.

“In fact only 2% of employers identified the threat of quotas as their motivation for action, so the EU has made the right move by resisting boardroom quotas so that countries can get on with addressing the real barriers stopping diversity at the top.

“Now more than ever, businesses recognise the role that diversity has to play in their growth strategy. No company can afford to be left behind on diversity, given the risk of missing talented individuals and losing customer share. Having a range of voices, at all levels in a company, is in the long-term interest of each and every business.”

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