A survey, by the CIPD and the Adecco Group, of more than 2,000 employers has found that overall hiring of new staff has increased, with 49 per cent of employers expecting to take on new recruits in the next three months - compared to 40 per cent last quarter. However, this is still well below levels seen in previous years.
The report’s net employment balance - which measures the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels - has fallen from –4 to –8 over the last three months showing the lowest figure since February 2013.
According to the latest quarterly Labour Market Outlook report, a 50 per cent increase in the number of businesses expecting to cut jobs compared to the spring report is cited. This rose from 22 per cent three months ago to 33 per cent in the latest report.
In the private sector, 38 per cent expect to make redundancies, as opposed to 16 per cent in the public sector.
The survey also shows that employers across all sectors intend to rein in pay increases over the next 12 months and those who do plan pay reviews expect the basic pay to increase by just 1 per cent - much lower than the 2 per cent median increase expected this time last year. In the private sector, median basic pay expectations have increased to 0.8 per cent from 0 per cent three months ago but whilst this is a modest rise in pay expectations in the private sector, improvement is hindered by a relatively large proportion of employers - 40 per cent - predicting the introduction of wage freezes in the 12 months to June 2021.
Gerwyn Davies - Senior Labour Market Adviser at the CIPD - the professional body for HR and people development, commented:
“This is the weakest set of data we’ve seen for several years. Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes. Hiring confidence is rising tentatively, but this probably won’t be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months. As a result, this looks set to be a sombre autumn for jobs. This will likely be accompanied by a pay squeeze for workers, which is actually to be welcomed to help preserve jobs despite any modest fall in real wages in the private sector. This could be an important factor in limiting large-scale job cuts, as it was in the last recession. We urge organisations to do all that they can to keep employees in work and only make redundancies as a last resort, exploring all other options first. This could include freezing recruitment, reducing hours or restricting overtime, or cuts to bonuses and deferring salary increases.”
Alex Fleming - Country Head and President of Staffing and Solutions, the Adecco Group UK and Ireland - stated:
“This latest report shows a mixed picture with regards to the status of the current labour market. Redundancy intentions have increased by 11 per cent compared to the previous quarter but, more positively, nearly half (49 per cent) of UK employers are planning to recruit over the next three months, which could be an indication that businesses are reshaping for the future. We’re also seeing more candidates applying for high skilled roles, which aligns with the trend of people sourcing alternate forms of education in order to upskill and expand their knowledge, during this time of uncertainty. As organisations continue transitioning into the new era of work, there will be ongoing shifts in working patterns not only for employees but also for those who are just starting out in their career. Therefore, businesses must demonstrate resilience and adopt new approaches to closing the skills gap by investing in upskilling and reskilling workforces. Creating a positive workplace culture is also integral to maintaining focus, engagement and motivation among existing employees.”
