Employment in the UK will continue to grow next year and surge to a record-high of 30m by 2015, according to the Chartered Institute of Personnel and Development (CIPD).
The Office for National Statistics (ONS) said earlier this month that employment increased by 499,000 to a record 29.6m in the three months to October.
However, average earnings (excluding bonuses) were just 1.7% higher than they were a year ago, well below the current inflation rate of 2.7%.
The CIPD’s annual ‘Baramoter’ report on the labour market concluded that continued growth in employment is likely.
However, excess workforce capacity built up in firms (caused by ‘labour hoarding’) could create another paradox with stronger economic growth accompanied by weaker employment growth, the CIPD said.
‘The ‘jobs enigma’, of strong growth in private sector employment in the absence of sustained economic growth, has been one of the most mystifying economic features of 2012,’ said CIPD Chief Economist Mark Beatson.
‘And if 2012 proved an enigma, the labour market appears equally difficult to pin down for 2013.’
He said that reasons for this ‘enigma’ remain unknown but some factors could include a moderation in labour costs (due to below-inflation growth in pay) and ‘labour hoarding’.