More stability in sight for employment, reports CIPD

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Improvements to recruitment activity and a decrease in employers’ redundancy intentions have started to slow the pace of declining job prospects.

The CIPD’s latest quarterly Labour Market Outlook report found that while three in ten employers are still planning redundancies this year, more stability is in sight for employment.

The report found that the net employment intentions figure, which measures the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels, has risen to –1 from a record low of –8 in the last quarter (July-September 2020).


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Recruitment intentions have also edged up for the second consecutive quarter.

More than half (53%) of employers said they plan to recruit in the three months leading up to December 2020, which is up four percentage points on the summer (49%), though down 16 percentage points on the same quarter last year (69%).

In the private sector, recruitment intentions have improved from 44% to 49% since the last quarter.

According to the report, employers are using a variety of methods to limit the impact of coronavirus including temporary layoffs/furloughing staff (41%), redeployment (37%), recruitment freezes (32%), freezing or delaying wage increases (29%), cutting bonuses (29%) and terminating temporary worker or agency worker contracts (27%).

Speaking to HR magazine, Gerwyn Davies, CIPD senior labour market adviser, said that redundancies should be avoided as an early cost-cutting option and employers should consider alternatives such as recruitment freezes and pay flexibility.

Davies said: “It is cost-effective if you factor in both the direct cost of redundancies and the cost of hiring new recruits when demand recovers. It also helps preserve skills and impacts positively on employee engagement and an organisation’s external reputation; all of which boosts long-term performance.”

He did however acknowledge that the right solution will depend on the organisation and sector.

Davies added: “To be effective, HR professionals need to draw on their expertise and experience with effective communication and consultation with the wider workforce to help maintain engagement and motivation levels.

“They also need to provide strategic and assertive direction upwards to ensure that the right decisions are made for the organisation and the wider common good.”

Fortunately, Davies noted, employers’ response so far has been similar to the previous recession and redundancy alternatives are being widely adopted.

He added: “This contributed to unemployment falling well short of many economics’ unemployment forecasts and HR is in a very influential position to help ensure that employers respond to this downturn in a similar way.”

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