A third of organisations expect to cut jobs in the third quarter of 2020, with job prospects remaining weak, according to a new report.
The latest quarterly Labour Market Outlook report from Chartered Institute of Personnel and Development (CIPD) and the Adecco Group shows a 50% increase in the number of organisations expecting to cut jobs compared to the spring report.
This rose from 22% three months ago and 33% in the latest report.
Alongside this, employers across all sectors intend to keep a tight rein on pay increases over the next year. Those who plan pay reviews expect basic pay to increase by 1%, much lower than the 2% median increase expected this time last year.
Gerwyn Davies, senior labour market adviser at the CIPD said: “This is the weakest set of data we’ve seen for several years. 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.
“This will likely be accompanied by a pay squeeze for workers, which is actually to be welcomed to help preserve jobs despite any modest fall in real wages in the private sector. This could be an important factor in limiting large-scale job cuts, as it was in the last recession.”
The survey showed that nearly twice as many private sector employers (38%) expect to make redundancies, compared with the public sector (16%).
Despite intentions to make job cuts, the survey found that of more than 2,000 of those polled, overall hiring intentions have increased.
Nearly half (49%) of employers expect to take on new recruits in the next quarter. This is compared with 40% last quarter.
Although this is positive, confidence remains well below levels seen in previous years, and has fallen in all three sectors of the economy: private, public and voluntary.
Net employment balance, a measure of the difference between the proportion of employers who expect staff to increase levels, and those who expect a decrease, has fallen from –4 to –8 over the last quarter. This is the lowest figure since the survey changed its methodology in 2013.
Employment confidence registered as highest in the healthcare sector and public administration, while hospitality, transport and storage and retail took a knock.