The UK’s labour market: strength or strain? The 2023 CBI/Pertemps Employment Trends Survey results

In partnership with Pertemps Network Group, CBI’s Employment Trends Survey tracks labour market trends and people challenges facing businesses across the economy. 

This year’s survey shows that persistent shortages in labour and skills remain a blocker to economic growth, with seven in ten firms impacted by shortages in the past 12 months. Of these, more than a third (38%) have been unable to grow and respond to new business opportunities despite demand, while 22% have scaled back investment in other parts of the business and 12% have shrunk due to shortages.  

Now, after deeper analysis of the full survey, we can present an even stronger argument for collaboration between business and government to counter shortages through measures aimed at enhancing long-term productivity – a key focus of our Business Manifesto published ahead of the likely General Election next year. Introducing incentives to encourage business investment in automation and turning the Apprenticeship Levy into a flexible Skills Challenge Fund to create a responsive skills system aligned with economic requirements are what business expects from a new government. Beyond skills, a future government should take a pragmatic approach to immigration and continue to take action to help those inactive overcome barriers to get back into work.  

Other key findings from the report include: 

• Recruitment: nearly half of businesses (48%) expect to grow their workforce in the next 12 months, up from 43% in 2022  
• Pay: nearly 4 in 10 firms (38%) are planning to increase pay in line with inflation, while just 8% expect to increase it above inflation 
• Competitiveness: firms’ perception in relation to the labour market’s competitiveness is the most negative since the question was first asked in 2008, with access to skills (77%) and labour (66%) as the top business’ labour market concerns. To ease the impact of labour shortages, 68% of businesses believe the government should introduce incentives for technology and automation investment to boost productivity and 65% want the government to reform the Apprenticeship Levy to give employers flexibility to spend levy funds on a variety of training 
• Cost of living: firms continue to support staff in a rising prices environment, more than 3 in 5 (61%) are offering employees more flexibility to work at home to reduce transport and fuel costs and nearly a half (48%) have given staff one-off bonus payments 
• D&I: diversity and inclusion remain a priority for more than nine in ten businesses (91%), with more than half (54%) prioritising supporting health and wellbeing, 39% improving inclusivity and building a culture of belonging and 37% supporting a multigenerational workforce 

Download the report to learn more about the Employment Trends Survey 2023. 

Get in touch with Eugenia to find out more about the CBI’s campaign to tackle labour shortages.