Although the pace of UK job loses have started to slow down this autumn, many firms are still considering redundancies, reveals a new survey.
In fact, 30% of UK employers are still contemplating more redundancies this year, despite modest improvements in planned recruitment, according to the latest Labour Market Outlook (LMO) survey, carried out by CIPD and the Adecco Group. Looking at the immediate jobs outlook, “the best that can be said is that the situation is getting worse more slowly”, stated Gerwyn Davies, Senior Labour Market Adviser for the CIPD, the professional body for HR and people development. “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.”
Recruitment intentions, while lagging well below pre-pandemic levels, have edged up for the second consecutive quarter. More than half (53%) of employers plan to recruit in the three months to December 2020 – up four percentage points on the summer (49%). However, it’s down 16 percentage points, compared to the same quarter last year (69%). In the private sector, recruitment intentions have improved from 44% to 49% since last quarter.
MINIMISING LAYOFFS
The also revealed a large amount of uncertainty around redundancy intentions. Almost one in five employers (17%) were unsure whether they would be making redundancies in the next three months.
“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,” noted Davies. In fact, many employers are using a variety of methods to limit the number of layoffs and the impact of the pandemic. These include temporary layoffs/furloughing staff (41%), redeployment (37%), recruitment freezes (32%), freezing or delaying wage increases (29%), cutting bonuses (29%) and terminating temporary worker or agency worker contracts (27%). In terms of future plans, employers said they would consider freezing or delaying wage increases (14%), short-time working (12%) and redeployment (12%).
JOB VACANCIES
Unsurprisingly, weaker employment growth over the past six months has also led to a noticeable increase in the number of applicants for vacancies across all skill levels. This is most apparent for low-skilled jobs, with employers reporting an average (median) of 25 candidates applying for each vacancy advertised; compared to 20 applicants in the summer. During the same period, medium-skilled roles have seen an increase from 10 to 15 applicants, while high-skilled roles have seen an increase from 7 to 10.
“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,” warned Davies.
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,” stated Alex Fleming, Country Head and President of Staffing and Solutions, at the Adecco Group UK and Ireland. “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.”
MAINTAINING STAFF MORALE
“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,” Fleming added.
She believes that providing upskilling and reskilling opportunities is a key way to do this as “it will only help to boost redeployment efforts”. It would also “help career starters who are looking to enter into the workforce for the first time against a backdrop of increased labour supply”, explained Fleming.
CIPD’s Davies agrees. “To help minimise the jobs fallout as restrictions continue, the Government should expand its training and employability support,” he said. “Reforms to the apprenticeship levy are needed to make it more flexible so firms can use it for other forms of accredited training and skills development, including for those workers being redeployed, working reduced hours or being made redundant. This would be an immediate way to boost badly needed adult skills investment.”
Davies also believes that there is a need to “significantly increase bespoke, sector-based training and to increase investment in the National Retraining Scheme”. This would “equip workers who do lose their jobs with the skills to find work in parts of the economy that continue to grow”, he added.
Click here for a copy of the report.
Sign up for our newsletter
