CBI calls on firms to boost pay and progression for staff
Business groups and analysts have cautiously predicted a positive year for jobs growth during 2014, but have warned that wages and productivity need to increase to come into line with the rising cost of living.
The CIPD announced that the 2012/13 “jobs enigma” that was a feature of the employment market last year would turn into a “jobs machine” in the coming year.
In the institute’s annual analysis of the labour market, chief economist Mark Beatson highlighted how UK employment has already reached a landmark 30 million, despite predictions from the Office for Budget Responsibility that this would not happen until autumn 2015.
He added that, as was the case for 2013, it is likely that the OBR’s predictions around employment will be outstripped again this year, possibly rising by more than 300,000 or even 500,000.
“If this turned out to be the case, the ‘magic’ 7 per cent unemployment rate will be reached during 2014,” said Beatson, referring to the trigger point at which the governor of the Bank of England has said he will review interest rates.
Beatson added that the impact of the recession on productivity had meant output per hours worked fell, and that this was something that needed to be addressed if workers were to expect real-term pay rises in the coming months.
Business group the CBI also offered a note of optimism, predicting that most companies would increase the size of their workforce, boost their graduate intake and increase the number of apprentices they take on.
However, director-general John Cridland said there were “too many people stuck in minimum wage jobs without routes to progression” and urged employers to give staff a pay rise where possible.
“Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work,” said Cridland in his new year message.
“As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze.”
Meanwhile, commuters and passenger groups bemoaned the fact that an average 2.8 per cent rise in rail fares came into effect this morning. According to the Rail Delivery Group, this is the smallest rise in four years, although rail campaigners claimed fares were still rising three times as fast as incomes.