Almost half of firms plan to cut or stop hiring amid pandemic
Almost half of UK firms expect to reduce recruitment or stop hiring new employees altogether over the coming year as they adjust to life during the coronavirus pandemic, a survey has found.
The latest CBI/Pertemps employment trends survey said a “two-speed” job market had emerged. It found 46 per cent of firms were looking to cut hiring or stop altogether, but 51 per cent of firms were planning to increase hiring.
The survey nonetheless marked a sharp deterioration in the recruitment market, with the overall measure balancing out to a score of just five per cent. That compared to a much more positive reading of 56 per cent last year.
A balance of seven per cent of respondents expected their workforce to be larger in 12 months’ time, compared to a balance of 28 per cent in last year’s survey.
It comes a few days after figures showed that 695,000 people in the UK had lost their jobs between March and August.
Economists say that many more job losses are to come as chancellor Rishi Sunak winds down the furlough scheme in October. Trade unions, opposition parties, think tanks and MPs have all called for some form of targeted furlough support to be extended.
However, the government and Bank of England have argued that the economy must be allowed to adapt and people must find work in stronger sectors.
Matthew Fell, CBI chief UK policy director, said: “The UK labour market has been under heavy stress since the outset of the Covid-19 crisis.”
He said that “although the economy has started to re-open, pressure on firms remains acute”. Fell added: “With ongoing social distancing, higher costs, lower demand, local lockdowns and fears of a second wave, firms are tempering their recruitment plans.”
The CBI and recruitment group Pertemps surveyed 248 firms between 17 August and 4 September 2020.
Nearly half – 48 per cent – of respondents said they were exploring business transformation and restructuring plans as a priority as they aim to cut costs.
A third of respondents plan to implement a pay-freeze across all roles, up from five per cent in 2019.