A third of businesses predict they will be making redundancies between July and September this year (2020).
This research comes from the Chartered Institute of Personnel and Development (CIPD) and The Adecco Group, an HR provider and temporary staffing firm, Labour Market Outlook survey. It found that 33 per cent are planning on making redundancies in Q3, which is a 50 per cent increase compared to Q2.
The private sector believes it is twice as likely to make redundancies (38 per cent) compared to the public sector at 18 per cent.
At the same time, employers also expecting to hire new staff rose to nearly half (49 per cent) from 40 per cent the previous quarter, still, this is low when compared to recent years.
Regarding pay, employers that planned to hold a pay review over the next 12 months will be increasing pay by 1 per cent, which is lower than 2 per cent which was predicted last year. Private sector employees are expecting a median rise of 0.8 per cent compared to 0 in Q2. Although 40 per cent are planning to introduce a pay freeze during the next 12 months.
Over two-fifths (42 per cent) have put a stop to recruitment in order to easer the number of redundancies needed.
Gerwyn Davies, senior labour market adviser at the CIPD, said:
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.
Hiring confidence is rising tentatively, but this probably won’t 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. As a result, this looks set to be a sombre autumn for jobs.
Alex Fleming, country head and president of staffing and solutions at Adecco Group UK and Ireland, said:
Redundancy intentions have increased by 11 per cent compared to the previous quarter but, more positively, nearly half of UK employers are planning to recruit over the next three months, which could be an indication that businesses are reshaping for the future.
As organisations continue transitioning into the new era of work, there will be ongoing shifts in working patterns not only for employees but also for those who are just starting out in their career.
The CIPD and The Adecco Group surveyed 2,000 organisations to obtain these results.