Dire predictions on hiring

Hiring intentions have plummeted, planned redundancies have increased and the pay outlook for employees is far from rosy.

Uncertainty over the coronavirus has caused a significant downturn in hiring intentions, an increase in planned redundancies and the likelihood of small pay increases over the coming months, according the spring 2020 edition of Labour Market Outlook from the CIPD.

  • The number of employers planning to hire more staff has fallen to its lowest level since the quarterly survey began in 2005; just 40% are planning to increase headcount in the three months to July 2020, compared with 66% who said the same in the winter 2019/20 survey.
  • Redundancy intentions have also increased over the quarter. More than a fifth (22%) of organisations expect to make some redundancies in the three months to July 2020.
  • Popular employer responses to the current crisis include extending homeworking significantly across the organisation (61%), recruitment freezes (44%), freezing or delaying planned pay increases (33%), introducing new flexible working arrangements (32%), cutting bonuses (29%) and cutting training budgets (27%).
  • More than two-thirds (67%) of employers intend to review pay over the next 12 months. On average, private sector firms expect a pay freeze compared with a 2% increase three months ago, while pay expectations remain unchanged in the public sector (1.5% increase) and voluntary sector (2% increase).

Meanwhile the effect of coronavirus on the job prospects of school leavers and graduates is illustrated by research from the Institute for Student Employers which shows that all types of entry-level roles have been reduced this year by 23%, with the ‘volatile’ jobs market forecast to shrink further as 15% of employers expect to scale back recruitment further in 2021. Employers are seeking 32% fewer entrants on apprentice or school leaver programmes than originally planned for this year, according to the ISE report, while graduate jobs have been cut by 12%. Internships and placements will also slump, by 40%, says the report.