The quarterly survey of HR trends and indicators from the Chartered Institute of Personnel and Development (CIPD) shows that recruitment difficulties will continue in this first quarter of the year with recruitment intentions in the public sector reaching their lowest levels.

Attempts to reduce levels of administrative and central government staff in the aftermath of the Gershon efficiency review is being blamed for the stagnant recruitment conditions in the sector.

The net figure for public sector employers expecting to take on more staff is zero; this compares to a net quarter of all private sector bosses who plan to employ more workers in a year. In the longer term, too, employers see no major tail off in employment – with a net 17% of employers expecting to employ more staff than they do now by this time next year. Over half of respondents (55%) anticipate ongoing recruitment difficulties in the coming quarter.

Encouragingly for the overall economy, say the CIPD, ongoing labour market pressures are still showing no sign of fuelling inflationary pay increases. One in four employers expect pay to remain stable or rise by less than 2%, and fewer than 5% of employers expect increases to exceed 4%. The vast majority (68%) expect pay increases to average between 2% and 4%.

Dr John Philpott, CIPD Chief Economist, said:

“The tight labour market is creating real difficulties for employers seeking to recruit new employees and retain existing ones. With pay restraint seemingly remaining the norm, employers are investing more time and effort in improving recruitment efforts. Many are also paying greater attention to work-life balance and family friendly policies in order to attract new staff, and retain and motivate the existing workforce.

“With the outlook for wage inflation seemingly benign, despite a tight labour market, the survey adds weight to the view that interest rates have peaked.”

Other key findings from the survey:

• Only pensions (32%) beat recruitment costs (23%) as the number one factor expected to increase future employment costs amongst employers
• Lack of specialist skills (66%) and experience (54%) are the main reasons given for recruitment difficulties experienced in the last quarter
• More than 40% of employers had experienced a complete absence of applicants for some vacancies
• Wider, more focused, or more online use of recruitment advertising, appointment of managers with particular responsibility for recruitment and the use of temporary agency workers with a view to converting these to permanent appointments are the top three responses to ongoing recruitment difficulties
• There is widespread support amongst people management professionals for the more family-friendly employment policies being put forward by politicians in the run-up to a general election – two thirds of employers in the survey offered their support for such policies

The survey covers over 1,300 employers, between them employing nearly 1.3 million people in the UK.