The survey conducted by the professional body for HR found that there was a significant fall in hiring confidence and an increase in redundancy intentions over the last quarter. Findings were published today (17 February).
This follows the rise in national insurance costs for employers, announced in the Autumn Budget last year, which is due to come into effect in April. The CIPD found that one in four (24%) employers believe that their employment costs will increase ‘to a large extent’ due to the rise in the national living wage to £12.21 in April 2025.
According to the research, redundancy intentions have risen to their highest level in the last 10 years, outside of the Covid-19 pandemic.
Vicky Walker, group director of people at health and wellbeing company, Westfield Health, believes that the rise in redundancies and hiring cuts will leave employees with anxiety about job security and career advancements.
She told HR magazine: “This uncertainty can be compounded by concerns over reduced wage increases, which may lead to financial stress and dissatisfaction among workers.”
Read more: John Lewis hints at further redundancies
The survey also found that a quarter (24%) of employers are cancelling or scaling down plans for investing in or expanding their business.
Speaking to HR magazine, Ben Willmott, head of public policy for the CIPD, stated that the rise in redundancies could affect workplaces in the long term. "Over the longer term, this may undermine efforts by employers to grow if they are unable to develop the skills and capabilities to innovate, adopt new technology and improve workplace performance," he said.
Mark Williams, managing director EMEA of workplace management platform, WorkJam, added that investing in technology to support employees is now more important than ever.
Williams told HR magazine: “Businesses that have implemented, or will soon adopt, tech-led measures to create a more rewarding workplace that attracts, supports and retains employees more effectively will be the winners in the long run.”
He emphasised the importance of enforcing strategies that protect the workforce and reduce risks. “Investing in new technology and automation to improve employee engagement and boost productivity will create a more resilient workforce, for the long haul.”
Read more: Productivity drives increased wellbeing support, employers say
There is also a potential growing risk that employers who are considering making cutbacks will also cut back on wellbeing initiatives, according to Walker.
She told HR magazine: "These initiatives are not just a cost but a vital investment in your people’s long-term resilience, health and productivity. Cutting back on them could lead to higher absenteeism, burnout and reduced morale, ultimately impacting companies financially.
“It’s critical for employers to approach [any decision to cut back on resources] with empathy and clear communication. Transparency is key – whether through team meetings, one-on-one check-ins or anonymous surveys – so employees feel heard and supported.”
Whatever changes employers make, said Wilmott, it is crucial that "HR is at the heart of discussions".
