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4h ago

UK Employers Hold Pay Settlements at 3% as AI Raises Job-Cut Expectations

The HR body urges restraint on employer taxes ahead of the 26 November budget to protect hiring.

Commuters cross London Bridge in view of the City of London skyline in London, Britain, July 25, 2024. REUTERS/Hollie Adams/File Photo
The jobs market is grappling with slower hiring since employment costs rose in last year’s budget

Overview

  • The CIPD finds a 3% median basic pay award for the next 12 months, compared with a 3.7% wage growth expectation in a recent Bank of England survey.
  • Overall recruitment plans are near the weakest since the pandemic, with public-sector hiring particularly soft.
  • One in six employers expects AI tools to reduce headcount within a year, and a quarter of that group anticipates cuts greater than 10%.
  • Junior managerial, clerical, professional and administrative roles are cited as most exposed to AI-related reductions.
  • The CIPD says last year’s higher employer social security contributions have cooled hiring and urges Finance Minister Rachel Reeves to avoid new measures while calling for skills investment.