A new survey on job prospects in the UK shows that companies are at their most optimistic about hiring new workers since the onset of recession.
But the squeeze on living standards will continue, with most employers in the CBI's poll remaining cautious about increasing pay – only 7% intend to raise salaries by more than inflation.
The business lobby group's annual employment survey showed that more companies expected to create jobs than not in the next 12 months. It also pointed to a brighter outlook for graduates and a pick-up in apprenticeship schemes and said the rise in permanent jobs was outstripping growth in temporary jobs.
But the report, with consultants Accenture, also highlighted firms' worries about filling skilled roles, particularly in science, engineering and construction. "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," said Katja Hall, CBI chief policy director. "It's good to see jobs being created across most regions, not just London and the south-east."
The survey of 325 companies, which employ a total of more than a million people, found that with 51% expecting their workforce to be larger in 12 months' time, the most buoyant outlook since 2008.
The poll found that employers in Yorkshire and Humberside and the east Midlands were the most optimistic about hiring new staff.
The survey provides welcome cheer for university leavers after official data recently suggested half of them are stuck in non-graduate level jobs. The CBI said a third of employers plan to increase their graduate intake over the next year while 13% planned to cut back.
The group stressed that youth unemployment at close to 1 million remains too high and urged improvement in careers advice in schools and more partnerships between employers, schools and colleges to help fill skills gaps. But it said it was encouraged by the big rise in employers' commitment to apprenticeships over the last year, with two-fifths (41%) intending to increase apprentice recruitment over the coming year.
Neil Carberry, director for employment and skills at the CBI, said concerns about degree costs and employability were raising the profile of alternatives to university as well as ushering a more "commercial" approach among school-leavers. "Young people and their parents are making a fundamentally different choice than five or 10 years ago," he said.
The survey highlighted obstacles to young people getting the new jobs opening up. Around two-thirds of businesses cited a lack of young applicants with appropriate knowledge and skills and 63% said there were too few with the right "aptitude and workplace behaviours".
The survey revealed more than a third of respondents planned to keep pay rises below Retail Price Index (RPI) inflation or to target an increase on certain staff only; 7% intend to raise pay by more than RPI and 42% expect pay to increase in line with RPI inflation.
Against the backdrop of a growing campaign for more money for Britain's lowest-paid workers, employers in the CBI survey rejected the idea of mandatory pay higher than the National Minimum Wage.
Only 12% of firms said there should be any legal obligation to pay the living wage – a voluntary rate of pay regarded as the minimum to meet the cost of living in the UK, championed by anti-poverty campaigners, the Living Wage Foundation.
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