11th August 2008
Employers are reducing recruitment levels and planning more redundancies, a survey has found.
The survey of 1,200 employers by KPMG and the Chartered Institute of Personal Development, found that just 29% plan to hire staff between July and September, down from 37% in the second quarter.
It also showed that the number of employers planning redundancies in the third quarter had risen to 27%, from 22% in the second quarter.
Andrew Smith, chief economist at KPMG, said that the labour market is looking "a lot less resilient". He added that employers were "seeking both to keep a lid on pay settlements and, in increasing numbers, planning for redundancies".
"Companies are now reacting to deteriorating market conditions," he said. "With sales slowing and input costs rising, but scope to raise prices limited by weakening demand, finances are under pressure."
KPMG said that the findings are "particularly worrying", given that the third quarter is traditionally a healthy period for employment, with much recruitment activity in September.
Trades Union Congress (TUC) General Secretary Brendan Barber told More Than Business News "it is understandable that workers are worried the credit crunch will eventually undermine their jobs."
He stressed that unions are working with employers to maintain employment and added: "We insist that record levels of profits, executive pay and bonuses should be reduced before workers’ jobs have to take the strain."
Drop in recruitment as redundancies rise
The survey of 1,200 employers by KPMG and the Chartered Institute of Personal Development, found that just 29% plan to hire staff between July and September, down from 37% in the second quarter.
It also showed that the number of employers planning redundancies in the third quarter had risen to 27%, from 22% in the second quarter.
Andrew Smith, chief economist at KPMG, said that the labour market is looking "a lot less resilient". He added that employers were "seeking both to keep a lid on pay settlements and, in increasing numbers, planning for redundancies".
"Companies are now reacting to deteriorating market conditions," he said. "With sales slowing and input costs rising, but scope to raise prices limited by weakening demand, finances are under pressure."
KPMG said that the findings are "particularly worrying", given that the third quarter is traditionally a healthy period for employment, with much recruitment activity in September.
Trades Union Congress (TUC) General Secretary Brendan Barber told More Than Business News "it is understandable that workers are worried the credit crunch will eventually undermine their jobs."
He stressed that unions are working with employers to maintain employment and added: "We insist that record levels of profits, executive pay and bonuses should be reduced before workers’ jobs have to take the strain."
Tags: Employment
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