Mixed messages on spring recruitment

Apr 14 2004 by Brian Amble Print This Article

Half of employers in the UK intended to hire staff this spring, with many expecting to encounter recruitment and retention problems.

But the newly-launched quarterly Trends and Indicators Survey from the Chartered Institute of Personnel and Development (CIPD) also found that nearly a quarter of employers were planning to make redundancies this spring, primarily because of restructuring.

In a third of cases, redundancies will result in a fall of up to two per cent in employee numbers. A fifth said redundancies would reduce staff numbers by at least five per cent.

Just under a third of employers cited "reorganised working methods" as the main reason for planned redundancies. A fifth mentioned "competitiveness" or "cost reduction", with others - particularly small and medium- sized companies - reporting budget reductions or a lack of demand for their products or services.

Significantly, one in ten firms in the banking and finance sector gave relocation of staff overseas as the primary reason for making redundancies.

John Philpott, chief economist at the CIPD, said there was a "three Rs effect" whereby reorganisation, recruitment and redundancies were occurring simultaneously. He believes that this effect will continue for the foreseeable future.

"Something we have noticed in the past couple of years is that redundancy is becoming a common feature of life, whereas in the past it was a sign of economic weakness," he said.

"It's now something that organisations do even in good times so they crank their workforce up a gear or make changes."

More than half - 53 per cent Ė of employers plan to recruit this spring, the survey found, with hiring is set to be strongest in finance and public administration. But further job shedding appears inevitable in manufacturing with a third of employers suggesting they will be shedding at least five per cent of staff.

The East of England and the West Midlands are predicted to see the heaviest job losses, while in terms of sectors it is the private rather than the public sector which will take the heaviest losses.

Almost two thirds of public sector employers expressed worries about recruitment difficulties over the coming quarter compared to only four out of ten private sector firms. But in contrast, almost nobody was worried about finding graduates, adding some credence to the belief that the UK is producing too many graduates.

But despite these looming recruitment problems almost half of firms said that they expect wage costs to rise by between zero and three per cent this spring.