UK employers fail to take on staff

10/11/2008

Demand for labour is falling across the UK, according to a new report.

The survey shows that demand for staff is at its lowest level since the Labour Market Outlook from the Chartered Institute of Personnel and Development/KPMG survey began in 2004. The balance between the proportion of employers expecting to hire more staff in the coming three months and those expecting to cut staff has dropped from +41 in Autumn 2007 to just +2 in Autumn 2008.

The research also indicates that 83% of employers expect the economic conditions in the UK to deteriorate this year. However only 25% of respondents believe that their own organisation will encounter more difficult conditions.

CIPD chief economist John Philpott said: “The year since the impact of the credit crunch was first felt saw the UK labour market move from a state of buoyancy to one of stagnation. We are now at a period of contraction, with jobs being lost, new jobs hard to come by and, as this week’s official statistics are set to confirm, unemployment on an ever sharper upward rise.”

The survey of 721 employers was conducted in September by Ipsos MORI and also reveals that staff pay, excluding bonuses, is set to increase by an average of 3.5% -- lower than the expected 3.7% increase. The average bonus has risen from 3.9% to 4%.