The Great Resignation has given way to The Big Stay, says the CIPD

The luxury belief that was  the so-called Great Resignation, appears to be over, even if you assume it ever existed. Workers are increasingly staying put in their current jobs and more employers are holding steady on staffing levels as the labour market slows, according to the CIPD’s latest Labour Market Outlook report. The survey shows more than half (55 percent) of employers are looking to maintain their current staff level – the highest level since winter 2016/17. The CIPD’s new report, based on a quarterly survey of 2,009 employers, also cites data from the ONS vacancy survey and analysis on turnover from the Labour Force Survey, with all indicators pointing to lower staff attrition in 2024 and trends returning to pre-pandemic levels.

In response to this employment context, the CIPD is calling on employers to focus on upskilling opportunities to retain and develop their existing workforce. Fewer employers are expecting staff levels to increase in the coming months, continuing the downward trend in workforce growth expectations. The CIPD’s Labour Market Outlook found that 30 percent of employers expect staff levels to increase in the next three months, down from 37 percent twelve months ago. Its net employment balance – which measures the difference between employers expecting to increase staff levels in the next three months and those expecting to decrease staff levels – has fallen from +22 to +19.

Upskilling the existing workforce is currently the most common employer response to hard-to-fill-vacancies (52 percent), while 36 percent of employers are increasing the duties of existing staff. Increasing pay, however, remains a popular option to address hard-to-fill vacancies with 41 percent of employers using this approach in the past six months.

James Cockett, labour market economist for the CIPD said: “When the economy reopened post-pandemic, turnover and vacancy levels rose in response to the hot recruitment market. Now, the so-called ‘Great Resignation’ is well and truly over and has been replaced by ‘The Big Stay’, with more people opting for job stability. Falling staff turnover and vacancies also mean the balance of power in the labour market is moving in the direction of employers and away from workers.

“Based on the trends in our report, there’s likely to be further falls in both turnover and vacancy levels in 2024. Employers will need to look forward and factor in this lower attrition when making decisions around staffing levels and the future of their workforce. We are now entering a more stable period, as recruitment trends bounce back to pre-pandemic levels.

“In this context, it’s even more important that employers invest in existing staff through upskilling and development opportunities. Skills are vital to meeting both current and future business demands and employers need to consider what skills need to be developed now, in order to create successful and productive workforces in future.”

Despite the evidence of a less dynamic and competitive labour market, the CIPD’s survey shows employers’ basic pay increase expectations for the next 12 months have not fallen since our previous survey and remain at 4 percent overall. These sit at 4 percent in the private and voluntary sectors and 3 percent in the public sector.

The latest Labour Market Outlook report surveyed 2,009 employers in March and April 2024 about their approaches to pay, staffing levels and addressing vacancies. Other key findings include:

UK employers continue to have hard-to-fill vacancies

• 37 percent of employers report hard-to-fill vacancies. Over half (52 percent) of public sector employers report hard-to-fill vacancies, compared to 33 percent in the private sector. Hard-to-fill vacancies are most prevalent among employers in education (58 percent).
• One in five (20 percent) employers expect significant problems in filling vacancies the next six months. This rate increases to two in five (39 percent) in the public sector.

Workforce growth expectations vary significantly across different sectors

• The net employment balance is just +3 in the public sector, compared to +24 in the private sector, demonstrating the gap between public and private sector employment intentions.

• Employers in the public sector are twice as likely as those in the private sector to decrease their total staff level over this period (19 percent v 9 percent). Overall, 11 percent of UK employers are looking to decrease staff levels in the next three months.