LONDON (Reuters) – Far more British businesses than last year are planning to cut recruitment of new staff or freeze hiring entirely over the next 12 months, following the hit from the coronavirus pandemic, a survey showed on Friday.
The findings represent a sharp turnaround from last year, when a large majority of companies said they intended to keep up or better their rates of recruitment.
The annual report from the Confederation of British Industry and the Pertemps Network Group recruitment consultancy showed 51% of companies planned to maintain or increase recruitment next year, while 46% foresaw a reduction or a complete stop.
The net balance of +5% compared with +56% in last year’s survey.
“The UK labour market has been under heavy stress since the outset of the Covid-19 crisis and, although the economy has started to re-open, pressure on firms remains acute,” said Matthew Fell, the CBI’s chief policy director.
One in three of companies said they planned to implement a pay freeze across all roles – compared with one in 20 in last year’s survey.
The figures chimed with a Bank of England survey on Thursday that showed a “large proportion” of companies planned to delay or cancel their annual pay reviews.
Finance minister Rishi Sunak is under pressure to announce a partial extension of the government’s furlough scheme by targeting help towards the worst-hit sectors of the economy in order to slow a wave of job losses.
While he has said the scheme will not be prolonged beyond the planned closure on Oct. 31, earlier this week he said he would be “creative” in seeking new ways to stave off unemployment.
Data on Tuesday showed Britain’s unemployment rate increased to 4.1% in the three months to July from the 3.9% level it had clung to since early 2020.
The Bank of England has forecast that unemployment will hit 7.5% at the end of this year, when it is expected to expand its bond-buying stimulus programme again.
The CBI/Pertemps survey of 248 companies was conducted between Aug. 17 and Sept. 4.
(Reporting by Andy Bruce, editing by David Milliken)
