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Redundancies set to increase in UK firms

UK News | Published:

One in three companies say they are preparing to lay off staff before the end of September.

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One in three companies expect to make redundancies by the end of September in a blow to Britain’s hopes of economic recovery from the coronavirus crisis, a new survey has found.

The 33% figure – revealed in a survey by human resources body the Chartered Institute of Personnel and Development (CIPD) and recruiter the Adecco Group – represents a rise from 22% of companies shown in the groups’ spring quarterly report.

The latest survey suggests the jobs market will continue to shrink through the summer quarter, with the number of employers expecting to hire workers falling further below the number planning for redundancies.

The report said its disparity marker between the two categories of employers fell four points from the spring quarter to -8, the lowest it has been since the survey’s current methodology was adopted in 2013.

“The survey data also suggests that the redundancy activity will be broad-based, with IT, manufacturing and construction sectors the most likely to be affected,” CIPD’s senior labour market analyst Gerwyn Davies said in the report.

It comes as analysts fear a major jobs decline in the autumn involving furloughed staff, as the Government’s job retention scheme winds down towards its October termination.

The latest CIPD-Adecco survey also showed employers had adopted a number of responses to cope with the pandemic.

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More than four in 10 (42%) had applied recruitment freezes, the sharpest examples coming in the hospitality sector (65%), business services (54%) and in IT (52%).

Boris Johnson
Prime Minister Boris Johnson’s hopes of economic recovery are likely to be rocked by the latest redundancy forecasts (Phil Noble/PA)

In seeking to preserve jobs, 18% of employers instituted pay cuts, 26% bonus cuts, and 33% froze or delayed pay rises. Pay cuts were most prevalent in construction (44%), business services (30%) and hospitality (29%).

Other responses have included introducing new or more flexible working arrangements (38%), cuts to training budgets (23%), temporary lay-offs through the Job Retention Scheme (54%), and the termination of agency or temporary worker contracts (32%).

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Additionally, 69% of employers extended home-working significantly across their workforce, especially in the fields of public administration and other public sector areas (85%), business services (84%), information and communication (81%), and education (71%).

As expected, fewer employers in hospitality (46%) and transport and storage (53%) were able to increase home-working.

The figures come with the UK’s economy expected to officially enter recession this week, having fallen by a record 20% in the spring quarter.

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