What’s ahead for 2015 in our labour market?
There has been much talk this last week of improved unemployment figures, some small rises in salaries and continued low inflation. So what’s ahead in 2015 and should employers be upbeat about the economy this year? Well, there seem to be hopeful signs – but there are also some “known unknowns” according to a recent CIPD report on the labour market.
We have a general election looming which brings its own uncertainty. The Office of Budget Responsibility forecasts that growth in salaries is set to stay around 1% to 2% and even with our current low inflation it means that wages in real terms will only increase slightly.
Interest rates which have been low since 2008 are likely to rise in 2015. Some mortgage or other borrowers who have taken loans on the assumption that interest rates will remain low may find it hard if interest rates start to rise. Yet any rise in interest rates is unlikely to be enough to please those with savings!
The economic situation across Europe, despite the European Union’s optimistic outlook, looks uncertain. High unemployment rates in Italy, Spain and Greece, particularly amongst the youth (under 25 year olds) which are running at between 44% and 54%.are holding their economies back. Here in the UK, while overall unemployment is running at 6%, our youth unemployment is 17% compared with other European countries like Germany, Netherlands and some Scandinavian countries where youth unemployment is between 4% and 8%.
And then there are the currency uncertainties; the Norwegian Kroner has taken a 30% tumble because of falling oil prices and conversely the Swiss Franc has risen sharply now that it has delinked from the euro.
Yet chief executives in the UK are more upbeat than they were three years’ ago about expanding their business than their counterparts in other European countries according to a Price Waterhouse Coopers report. They are, however, more concerned than before about the skills gap with 84% of them reporting concerns about finding the right skills and talent for their business. Chief Executives reported that they wanted the government to prioritise its commitment to developing a “skilled and adaptable” workforce.
So what does this mean for you as a leader, manager or employer in 2015? How will you ensure you retain your key talented staff and ensure that any expansion with new positions are filled by people who have the right values, attitudes and skills to contribute effectively to your business?