New research has shown that there is more stability for employment expected this year, but three in ten employers are still planning redundancies.

According to the latest Labour Market Outlook report from the Chartered Institute of Personnel and Development and The Adecco Group, the pace of decline in UK job prospects is starting to slow this autumn.  This is due to modest improvements in planned recruitment activity and a slight decrease in employer’s redundancy intentions.

The survey, conducted in late September and involving more than 1000 employers covering all sectors of the economy, showed that the net employment intentions figure - which measures the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels - has risen to –1 from a record low of –8 in July to September 2020.

The improvement is marked in the private sector where the negative balance is up -5, from -13 in the summer.

The intent to recruit has edged up for the second consecutive quarter, with 53 per cent of employers planning to recruit in the last three months of the year. This is up by four percentage points from the summer – but down 16 per cent on the same quarter last year.  Private sector intent to recruit has gone up from 44 per cent to 49 per cent since the last quarter.

The survey showed that 30 per cent of employers plan to make redundancies this quarter, as opposed to 33 per cent in the summer. However, despite the decrease 17 per cent stated that they could not say whether they would be making any redundancies during the next three months.

It was also noted that weaker employment growth has led to a noticeable increase in the number of applicants for vacancies over all skill levels, most apparently for low-skilled jobs - with an average of twenty five applicants for each vacancy, against twenty applicants in the summer. This compares to an increase from seven to ten applicants for the medium roles.

Gerwyn Davies - Senior Labour Market Adviser for the CIPD - stated:

“When it comes to the immediate jobs outlook, the best that can be said is that the situation is getting worse more slowly. Employment looks set to keep falling and the relatively weak demand for labour means that it is going to be a long and hard winter - affecting young jobseekers in particular. The survey evidence shows that while recruitment freezes, pay restraint or cuts in hours of work via government schemes have helped save many jobs that might otherwise have been lost; holding onto staff when order books are far from healthy eats into company profits. Despite the furlough scheme recently being extended, more employers might look to reassess staffing levels early in the new year as they plan for what their workforce will look like medium to long-term.  There is also a need to significantly increase bespoke, sector-based training and to increase investment in the National Retraining Scheme to equip workers who do lose their jobs with the skills to find work in parts of the economy that continue to grow.” 

Alex Fleming - Country Head and President of Staffing and Solutions, the Adecco Group UK and Ireland - commented:

“Despite the jobs market remaining uncertain, it’s positive to see a slowing of downward trends, with redundancy intentions decreasing modestly compared to the summer Labour Market Outlook report and more than half of UK employers planning to recruit in Q4. 

Employers have continued to adopt a variety of tactics in order to reduce redundancies, including the furlough scheme and redeployment. However, with a new month-long lockdown now in place, it’s more important than ever that as much support as possible continues to be provided by the Government and organisations to help minimise the jobs fallout.  

Providing upskilling and reskilling opportunities is a key way to do this, as it will not only help to boost redeployment efforts, but also help career starters who are looking to enter into the workforce for the first time against a backdrop of increased labour supply. 

There is also continued demand to maintain morale and engagement at this unprecedented time, so focus should remain on building positive workplace cultures and strengthening the resilience of companies and workforces alike.”