(Solution) CIPD 5HR02 impact of changing labour market conditions on resourcing decisions


A labour market is a market where employers look for talents and employees search for available jobs. According to Boys (2022) the labour market can be tight or loose. When the labour market is tight, unemployment is low and there are many unfilled job vacancies. The impact of tight labour market on resourcing decisions is recruitment struggles and difficulties in retaining talents. CIPD’s (2023) labour market outlook report found that the market is tight and organisations are facing challenges to recruit senior roles and skilled talents. A labour market is loose when unemployment rate is high and few job vacancies are available. During this period, organisations face less challenges in recruiting talents. There is plenty of talents in the market.

Other trends in labour market

Economic trends – CIPD (2023) labour market outlook found that there has been persistent rise in inflation and interest rates. These aspects affects organisations ability to make huge profits and to hire a huge number of talents. The report found that 17% of employers are planning for redundancy. When economy is declining, organisation reduce hiring more employees, but positive economic bring new opportunities.

Technology – CIPD’s (2022) talent planning and resourcing survey report found that 80% of organisations are using technology to recruit talents. The impact to resourcing decision are increased candidate accessibility and experience.

Please click the icon below to access this assessment in full