Firms expect workforces to fall
May 16, 2005
Nearly half of British employers expect to reduce the size of their workforce in the next year, says a survey.
The public sector was most pessimistic about the employment outlook, claimed the Chartered Institute of Personnel after surveying 1,300 firms.
Analysts said recruitment confidence may have dropped due to a recent spate of job losses and pledges to cut public sector waste.
Many firms said they planned to recruit migrant workers to plug skills gaps.
The institute's chief economist John Philpott said: "With the labour-intensive, consumer services sector experiencing tougher times, and with public sector employers looking to make efficiency savings, the survey might be signalling more than an end of the jobs boom."
Findings 'unusual'
Employment is currently at record levels.
The survey also found three out of four employers believed pay rises would range from 2% to 4% in the coming year.
But some predicted directors' pay would increase by more than 5%.
On migrant workers, more than one in four of those questioned said they planned to recruit migrant workers to help deal with a shortage of skilled staff.
Mr Philpott said such strategies were not used to get staff on the cheap.
"Migration is helping to prevent wage inflation - as our survey finds most employers are expecting pay pressures to remain subdued. It is not, however, generally being used to cut pay rates," he said.
BBC business correspondent Nils Blythe said the findings in the institute's three-monthly survey were unusual.
"Employment is currently at record levels with 28.5m jobs in the economy. But if the personnel professionals are right - that total will be lower in a year from now," he said.
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