Insights from the CIPD Labour Market Outlook 2023
The CIPD recently published their Labour Market Outlook: Summer 2023. So, in this blog post I thought I’d take this opportunity to review the evolving dynamics of the employment sector that it highlights. The key points provide significant insights, especially concerning career management in organisations. Let’s delve into the implications and recommendations that these findings present, focusing especially on the invaluable role of career conversations and mentoring.
- The Net Employment Balance: The Net Employment Balance – which measures the difference between employers expecting to increase staff levels in the next three months and those expecting to decrease staff levels – remains stable at +28. This stability underscores a general optimism among businesses. This positivity is most pronounced in the private sector. Meanwhile, the public sector sees a marginal drop, and the voluntary sector witnesses a significant leap. The implication? Even as sectors evolve differently, the emphasis on individualised career conversations becomes paramount. Employees need to know where they fit into the broader picture and how sectoral shifts might impact their own progression. Career conversations serve as the conduit for these understandings, helping employees align their aspirations with organisational goals.
- Redundancy Intentions: Redundancy intentions remain low in historic terms but have continued their gradual rise since 2021. The increasing redundancy intentions, especially in the public sector, should serve as a wake-up call for organisations. As redundancies rise, it’s essential to have mentors in place to guide affected individuals. Mentoring can offer solace, provide new avenues for skill development, and open up networking opportunities. For those remaining, mentors can also ease fears and enhance engagement.
- Wage Bills and the NMW/NLW Impact: With 18% of employers affected significantly by hikes in the National Minimum Wage and the National Living Wage, there’s a heightened need for transparent conversations. In sectors like hospitality, where the pinch is more pronounced, career conversations become even more critical. Employees must understand the factors that influence and determine wages and how they might affect career progression. Additionally, mentoring can help employees navigate such challenges, offering strategies to upskill, diversify skill sets, or pursue lateral movements.
- Median Expected Basic Pay Increase: The median expected basic pay increase remains at 5% for the third consecutive quarter. The consistent pay rise, especially the notable increase in the public sector seems positive. However, since it remains lower than inflation, it is a cause for concern, both for employees and organisations. Career conversations provide a platform for employees to voice their concerns about wage stagnation. By understanding these concerns, organisations can address them in other ways, such as offering non-monetary benefits. Additionally, mentors can help reinforce the broader value proposition of staying with the organisation, emphasising other benefits like learning and development, growth opportunities, and workplace culture.
- The Counteroffer Trend: The fact that 40% of employers made a counteroffer in the last year, with a large number offering more than before, hints at a competitive talent market. Retaining talent is becoming challenging. In such a scenario, proactive career conversations can pre-empt the need for counteroffers. By addressing aspirations, growth opportunities, and concerns routinely, organisations can stay ahead of potential attrition triggers. Furthermore, mentors play a pivotal role in talent retention. A good mentor not only aids in professional growth but also fosters a sense of belonging. As a result, the mentee is less likely to seek opportunities elsewhere.
- Nature of Counteroffers: Among employers providing counteroffers, the majority tend to match or offer higher salaries. This trend underscores the necessity for organisations to be attuned to market standards. While remuneration is vital, career conversations and mentoring can provide holistic value propositions. This emphasises non-monetary growth aspects such as learning opportunities, changes in role, and organisational contributions.
In light of the findings from the CIPD Labour Market Outlook 2023, it’s evident that the landscape of career management is experiencing subtle shifts. While wage increments and counteroffers are direct strategies in talent management, they are reactive. In contrast, regular career conversations and robust mentoring programmes are proactive, ensuring that employees feel valued, understood, and integrated into the organisation’s future. Such initiatives not only enhance retention but also foster a culture of growth, collaboration, and mutual respect. As the job market dynamics continue to evolve, these proactive strategies will be the cornerstone of effective talent management.
Click here to read the full CIPD Labour Market Outlook 2023.
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