Britain’s employment landscape is booming, with two separate surveys suggesting that around half of organisations expect to increase their head counts over the next few months.
The Reed Recruitment Index found that the number of firms planning to take on staff during the third quarter of the year has grown 10 per cent on the second quarter.
Almost nine out of ten (88 per cent) of the 1,500 firms surveyed said that they would recruit, with four out of ten increasing overall staff numbers.
Figures from the Chartered Institute of Personnel and Development (CIPD) paint a similar picture, suggesting that eight out of ten firms intend to recruit this quarter, with almost six out of planning an overall increase in staff numbers.
The CIPD’s research also bodes well for next year. Four out ten firms expect to be employing more staff by the summer of 2005, with just 17 per cent predicting a decrease in employee numbers, a positive balance of 23 per cent.
Only six per cent of firms plan to reduce their levels of staff over the coming quarter, a two year low.
Prospects are particularly bright in IT and banking, Reed found, with more than two thirds (68 per cent) of companies in the IT sector planning to recruit over the next quarter and half of firms in banking and finance.
But with massive job cuts looming, the public sector has hit the buffers. Only 27 per cent of public sector bodies plan to recruit to grow while 13 per cent expect to reduce their headcount.
The flip side of such a buoyant outlook are the inevitable skills shortages and recruitment difficulties. The CIPD suggest that around half of firms expect to have difficulties filling vacancies while more than a fifth report having received no applicants at all for vacancies.
The CIPD’s John Philpott said that the economic recovery is gathering pace and the labour market is getting ever tighter.
"Despite this there is still no sign of an imminent surge in wage pressure. But with private sector recruitment increasing at a time of low unemployment, employers will have to remain on their guard to ensure that wage costs are kept under control," he said.
Meanwhile Reed’s James Reed warned that upwards pressure on salaries would only increase if current trends continue.
"Employers need to prepare for this changed economic climate now by reviewing their recruitment and retention strategies,” Reed said.