The spring labour market outlook from the CIPD has promising news on the economy as the firms continue to regain ground lost during the pandemic, with all the main employment indicators showing an upward tick.

With employment intentions being stronger than at any time since the winter 2012/13 there is likely to be a fresh challenge on the horizon in the form of a squeeze on labour market talent, with resulting pressures on wages and remuneration packages to both retain and attract the talent needed to grow organisations.

Some of this is being fuelled by a decline in unemployment as vacancies creep up and a decline in the number of EU workers in the labour market, which has fallen by 7.4% between October–December 2019 and October–December 2020 according to data from Migrant Worker Scan, most likely due to the double whammy of Brexit and Covid19 restrictions.

In terms of pay the forecast is equally upbeat with basic pay award expectations increasing to 2% from 1% compared with the previous report for the private sector.  It is unclear if this trend is likely to increase but can be indicative of employers feeling more confident about the immediate future.

Key findings from the labour market outlook report


  • The net employment intentions figure for Q2 has risen sharply to +27 from +11 in the winter 2020/21 report. This is due to both a halving of redundancy intentions, down from 20% to 12%, and a rise in recruitment intentions. The improvement has again been driven by the private sector, which saw an 18 percentage point increase since the last quarter.
  • Top 5 sectors for employment growth are 1) Healthcare, 2) Information and communication, 3) Administrative and support service, 4) Construction and 5) Hospitality and Leisure


  • Redundancy intentions have continued to fall over the quarter. Just over a tenth (12%) of organisations expect to make job cuts in the next three months, down from 20% the previous quarter. The fall takes redundancy intentions to below pre-pandemic levels (16%) for the first time.


  • Average basic pay expectations have bounced back to pre-pandemic levels at 2%, having stayed at 1% over the past four quarters.