Employers scale back on employment-related operations

News Article - 18 November 2011
Category: Business

UK employers are freezing their plans to hire new employees and make redundancies in the light of continued economic uncertainty, according to the CIPD autumn Labour Market Outlook report.

The survey of over 1,000 UK employers revealed many are basing their employment-related decisions on the current financial climate.

It was found that all hiring and redundancy intentions have fallen across all sectors in comparison with previous Labour Market Outlook reports.

The percentage of firms looking to attract migrant workers dwindled from 25 per cent to 19 per cent over the last quarter.

The Labour Market Outlook net employment index also measures the difference between employers that are likely to increase and decrease their staffing levels and it found the employment situation is likely to worsen in Q4 2011 with the index falling to -3 from -1 in Q3 2011.

Gerwyn Davies, public policy adviser at the CIPD and author of the report, said: "The figures point to a slow, painful contraction in the jobs market.

"Many firms appear to be locked in 'wait and see' mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the Eurozone crisis and wider global economic turmoil.

"The good news resulting from this lull in business activity is that fewer employees are looking to relocate abroad or make redundancies."

Mr Davies believes that further increases in unemployment are inevitable as a result of businesses sitting tight and accepting their current lot.

He added: "The downside [to businesses scaling back on recruitment and redundancies] is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility."

Article keywords: hiring, redundancy, obr

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