Responding to latest official labour market statistics, showing the unemployment rate stood at 3.8%, Tej Parikh, Chief Economist at the Institute of Directors, said:
“The UK jobs market ended last year in fine form, but 2020 may be more challenging for employers.
“The labour market has shown significant resilience in the face of uncertainty in recent years. Businesses have continued onboarding new staff to bolster their output, at a time when investing in machinery and technology has proven too risky. High employment has been a boon for the economy, which has benefitted from the uplift to household incomes.
“Despite the slight uptick in vacancies, the jobs boom cannot last forever. As more and more workers enter employment, it becomes harder for firms to recruit the employees they need, with a particular dearth in certain skill-sets. The difficulty in finding suitable staff is underscored by the high number of postings, which business leaders will face an uphill battle to fill. At the same time, smaller firms, which employ the bulk of the workforce, will struggle to raise pay packets further given a slew of hefty costs.
“Business leaders are eager for the Government to set out its plans for revamping the skills system, from further education to the new National Skills Fund. Guidance on our future immigration system will also be crucial, as many firms engage in longer-term recruitment planning.”