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Hiring down in spring

14/05/2008

Demand for staff reaches four-year low with employers adopting 'wait and see' attitude, survey finds.

The latest quarterly Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook (LMO) survey of UK employers finds overall demand for staff has weakened since the end of last year – and is weaker than in any of the spring surveys since the series began in 2004.

However, there is no dramatic deterioration in response to the economic slowdown and employers are adopting a 'wait and see' approach to recruitment rather than cutting jobs, according to the report.

Some 37 per cent of the 735 employers questioned by Ipsos MORI expected to increase staff levels in the spring quarter (March-May 2008).

This is slightly higher than the 34 per cent recorded in the winter quarter (December 2007-January 2008) but well down on the autumn quarter (September-November 2007) figure of 46 per cent.

The spring 2008 figure is also lower than that recorded in spring 2007 (39 per cent), spring 2006 (41 per cent), spring 2005 (49 per cent) and spring 2004 (53 per cent).

The jump in inflation does not seem to be affecting pay packets either, the survey shows, which will be some comfort to the Bank of England.

Almost two in five employers surveyed intended to carry out a staff pay review in the spring quarter. Of these, a quarter expected to be awarding average pay increases of two per cent and almost a third (32 per cent) increases of three per cent.

Dr John Philpott, chief economist at CIPD, said: "Conditions in the UK labour market are clearly softer than six months ago and softer than at this time of year for several years.

"But net hiring (recruitment minus redundancies) remains strongly positive which suggests that while the labour market is currently experiencing a period of relative slowdown – which should in due course show up in official statistics, possibly in those being released later today by the Office for National Statistics – the market is far from approaching a state of meltdown."

However, Dr Philpott warned that falling confidence in the economy could still trigger a wave of job cuts leading to a "sudden avalanche of redundancies".