Labour Market Outlook report

Winter 2023-24 overview

This quarter, we see the tide turning on pay. For over a year, expected basic pay awards for the upcoming 12 months have been at 5%. This quarter, they have fallen to 4%, matching the level of CPI inflation reported in the 12 months to December 2023.

Decreasing staff levels is higher on the agenda in 2024, in response to the higher wage costs experienced over the past couple of years. This is evident in both the public and private sector.

Labour market tightness is meanwhile reducing. Our data show there will be further easing in the coming months, as fewer employers are expecting significant problems filling vacancies going forward.

Read on for our latest labour market data and analysis on employers’ recruitment, redundancy and pay intentions this winter.

Key findings

	Net employment balance remains positive The 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 – remains positive but has fallen from +26 last quarter to +22 this quarter.
	Public sector employers twice as likely to reduce staff levels Nine per cent of private sector employers plan to decrease staff levels in the next three months. The rate is twice as high in the public sector, where 18% of employers plan to decrease staff levels in the next three months.
	Redundancy intentions remain stable Overall, 18% of employers are planning to make redundancies in the three months to March 2024.
	Hard-to-fill vacancies remain prevalent Thirty-eight per cent of employers surveyed have hard-to-fill vacancies. Hard-to-fill vacancies are significantly higher in the public sector (51%) than the private sector (34%).
	Expected pay awards fall below peak for the first time in a year The median expected basic pay increase has fallen from 5% last quarter to 4% this quarter. Expected pay awards in the public sector fell further than in the private sector to 3%.