BY Fraser Tennant
One in three companies in the UK expect to make redundancies in the third quarter of 2020, according to a new report by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group.
The report, based on a survey of more than 2000 employers, found that employment confidence has fallen in all three sectors of the economy: private, public and voluntary. In the private sector, 38 percent of firms plan to make redundancies, compared to 16 percent in the public sector.
Overall, the figures represent a 50 percent jump in the number of employers expecting to cut jobs compared to three months ago.
“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,” said Gerwyn Davies, senior labour market adviser at the CIPD. “Hiring confidence is rising tentatively, but this probably will not 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.”
That said, amid the gloomy forecast, there is some positivity. “Nearly half (49 percent) of UK employers are planning to recruit over the next three months,” said Alex Fleming, country head and president of staffing and solutions at the Adecco Group UK and Ireland. “We are 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.”
Other key findings of the report include: (i) a large variation across sectors in terms of the net employment balance, with employment confidence highest in healthcare and public administration, and lowest in hospitality, transport and storage, and retail; (ii) in terms of the nations and regions, confidence is highest in Wales and North East England, and lowest in the West Midlands and Scotland.
In addition, more than four in 10 employers have implemented recruitment freezes. The proportion of organisations adopting a recruitment freeze is significantly higher for the private sector than the public sector, especially in hospitality, business services and IT.
“Businesses must demonstrate resilience and adopt new approaches to closing the skills gap by investing in upskilling and reskilling workforces,” concluded Mr Fleming. “Creating a positive workplace culture is also integral to maintaining focus, engagement and motivation among existing employees.”