UK companies positive on job creation

More than half of UK companies say they expect to create new jobs, the first time since the start of the Great Recession, according to a CBI/Accenture survey.

On the Up – The CBI/Accenture Employment Trends Survey includes details on companies that together employ over one million people. Fifty-one percent of respondents said they expect to have larger workforces over the coming 12 months.

Employers in the private sector expect to create more jobs throughout the UK, with Humberside, the East Midlands and Yorkshire predicting the highest increases in job creation.

A relatively high percentage of UK adults have jobs.

Job creation good news for young people

A growing number of firms say they are planning to take on more apprentices and graduates, which is good news for young people.

A cautious approach to pay and flexible contracts are vital for sustainable job creation, says the CBI (Confederation of British Industry).

CBI Chief Policy Director, Katja Hall, said2:

“We’re starting to see the recovery have an impact on business plans to hire, with more than half of firms boosting staff numbers next year and more opportunities for young people.”

“It’s good to see jobs being created across most regions, not just London and the south-east. Our labor market performed well throughout the recession and pay caution and flexible contracts will continue to underpin growth.”

“For the UK to remain an attractive place to do business, as the recovery takes hold, wage growth must go hand-in-hand with growth in productivity.”

Below are some highlighted data from the survey’s findings:

  • New permanent jobs are being created at a faster rate than temporary posts, with 35% of companies planning higher permanent recruitment and 17% less, compared to 29% planning more temporary jobs and 15% less.
  • +20% of employers said they plan to increase graduate recruitment over the coming 12 months (33% plan to increase while 12% plan to decrease).
  • +34% of organizations plan to offer more apprentice jobs. 81% of firms expect to be offering new jobs for young people over the coming year.

Job creation another sign of the UK’s economic recovery

Olly Benzecry, managing director for Accenture in the UK and Ireland, said:

“The news that firms are expecting to grow their workforces is another welcome sign of the UK’s economic recovery.”

“The skills agenda is critical to not only sustain this growth but to make it inclusive, increasing employability and opportunities for young people who are not in a job, training or education.”

“UK businesses clearly recognize the value of closer collaboration with education and the need for more vocational training and apprenticeships, and this is starting to translate into action through initiatives such as Movement to Work.”

“Even so, there is much to be done if the UK is to remain competitive in the global economy, attract investment and tackle the challenge of youth unemployment.”


Thirty-nine percent of employers plan to offer pay rises below the Retail Price Index (RPI), or to target specific staff with increases, while just 7% expect to raise pay by more than RPI.

Forty-two percent expect pay to increase in line with RPI inflation, which suggests salaries will start increasing over the coming twelve months, but moderately. Only 8% of firms plan to freeze pay.

Forty-two percent of firms say that wages can only rise as productivity improves, which can be achieved through higher skills. Forty-three percent said the ‘living wage’ is useful as a voluntary reference point. Twelve percent of companies believe the living wage should be a legal minimum obligation.

Job creation and flexible employment go hand-in-hand

Flexible employment, including the use of agency workers and zero-hour contracts, is seen as either important or vital for the UK economy and job creation by 97% of all respondents.

The CBI wrote “Respondents said that they (flexible employment) enable companies to cope with fluctuating demand (87%), respond rapidly to growth opportunities (81%) and provide a stepping stone into work for those vulnerable to long-term unemployment (58%), as well as offering choice to those who don’t want full-time work (65%).”

The burden of employment regulation is seen as the greatest threat to flexibility and UK labor market competitiveness by 68% of employers. Seventy-nine percent of respondents said that losing its Working Time opt-out would be bad for the UK economy – 51% believe the impact would be severe or significant.

Katja Hall added:

“The minimum wage successfully acts as a floor on pay, protecting workers while ensuring jobs can continue to be created. The living wage can only remain an aspiration that helps some firms pay more, but it must remain voluntary. Moving to a statutory approach would undoubtedly hit jobs and opportunity.”

“Most businesses believe that flexible employment patterns, including agency and zero-hours work, are a critical tool when demand fluctuates and a firm needs to react quickly. These contracts create opportunities for people looking for work that might not otherwise exist, and also attract investment to the UK.”