The CIPD’s quarterly Labour Market Outlook is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions.
As echoed both in this Make A Difference feature “The 2025 challenges that need to be on your radar” and in this article outlining “Hot topics and investment priorities for workplace culture, employee health and wellbeing”, the CIPD’s winter 2024/25 report indicates that rising employment costs, driven by National Insurance contribution increases and the reduction in the ‘secondary threshold’, are forcing many businesses to rethink their workforce strategies.
Here, two leading voices respond to the report’s findings.
Rethinking approaches to recruitment and retention
Commenting on the latest CIPD Labour Market Outlook, Mark Jones, Reward and Benefits Partner at Isio said: “With confidence falling sharply, its clear employers are still navigating a complex environment of rising costs, persistent skills shortages, and shifting workforce expectations. Small businesses, in particular, may struggle to expand their talent pools, which could limit long-term resilience.
“With private sector confidence at its lowest in a decade, excluding the pandemic, employers are facing increased pressure to remain competitive, particularly in attracting and retaining key talent. However, pay alone isn’t the answer. Employers who take a broader view, investing in benefits that support financial wellbeing, flexibility, and career development, will be better placed to sustain engagement and productivity in the long term.
“To build a workforce that is both diverse and sustainable, businesses must rethink their approach to recruitment and retention. Creating opportunities for those facing employment barriers – such as older workers, parent returners, and individuals with long-term health conditions – isn’t just about inclusion; it’s a practical solution to ongoing talent shortages.”
Implications for workers over 50
Meanwhile, Catherine Foot, Director of Phoenix Insights, which advocates for better, longer lives said: “Today’s figures highlight ongoing challenges in the labour market. With recruitment intentions slowing, economic inactivity remains a concern. To help close the gap in economic inactivity, pay alone isn’t enough to support workers back into employment. We need to look at factors beyond pay – flexible work is the top priority for workers over 50 seeking to remain in work.
“While many still face barriers to re-entering the workforce, our Employment Index reveals that access to meaningful, well-paid employment varies significantly across the UK. This disparity can impact long-term financial security, particularly for those nearing retirement. Workers in regions with lower job satisfaction and financial security are less likely to save effectively for retirement. Flexibility is key to helping people stay in work longer to save and earn, but it’s not just about pay – it’s about creating an environment where people feel secure and supported in balancing work with health or caring needs.
“With vacancies declining, it’s important that roles provide flexibility, job security and inclusive recruitment. The Government’s Employment Rights Bill and Get Britain Working White Paper are steps in the right direction, but more action is needed to create a labour market that works for all.”
You can download CIPD’s most recent quarterly Labour Market Outlook report here.
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