A third of employers are expecting to cut jobs in Q3 of this year according to new research from the Chartered Institute of Personnel and Development( CIPD) and the Adecco Group.
The latest quarterly Labour Market Outlook report shows a 50% increase in the number of organisations expecting to cut jobs compared to the spring report, rising from 22% three months ago to 33% in this latest report.
Twice as many private sector employers (38%) expect to make redundancies compared to the public sector (16%).
The survey of more than 2,000 employers found that overall hiring intentions have increased, with almost half (49%) of employers expecting to take on new recruits in the next three months, compared to 40% last quarter.
However, this confidence remains well below levels seen in previous years. It also found that employment confidence has fallen in all three sectors of the economy: private, public and voluntary.
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 minus 4 to minus 8 over the last three months.
This is the lowest figure since the survey was conducted using its current methods (February 2013).
The survey also finds that employers across all sectors intend to keep a tight rein on pay increases over the next 12 months. Those who plan pay reviews expect basic pay to increase by 1%, much lower than the 2% median increase expected this time last year.
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Median basic pay expectations in the private sector have increased to 0.8% from 0% three months ago. While we see a modest rise in median basic pay expectations in the private sector, overall improvement is hindered by a relatively large proportion of employers able to predict the outcome of a pay decision over the next 12 months that plan to introduce wage freezes in the 12 months to June 2021 (40%).
Gerwyn Davies, senior labour market adviser at the CIPD, the professional body for HR and people development, said: “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 海角视频 and Ireland, said: “This latest report shows a mixed picture with regards to the status of the current labour market. Redundancy intentions have increased by 11% compared to the previous quarter but, more positively, nearly half (49%) of 海角视频 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.”