Downturn was most dramatic in private sector; employers urged to invest in staff ‘to boost productivity and resilience’
The number of employers expecting to increase staffing levels over the next three months has dropped by 4 per cent, in further evidence of uncertainty in the labour market that has been blamed on the vote to leave the EU.
According to newly released Labour Market Outlook research from the CIPD and Adecco Group UK & Ireland, 36 per cent of firms plan to recruit over the next three months, a figure that has dipped from 40 per cent during the last quarterly survey in May. There was no change in the proportion of organisations saying they would decrease staffing (19 per cent).
As a result, the net employment balance, based on the difference between the share of employers expanding and those contracting their workforce, fell from +21 to +17. The drop was markedly greater among private sector firms, where the post-Brexit employment balance fell to +25 from +39.
However, more than three-quarters (76 per cent) of employers said the vote to leave the EU would make no difference to their recruitment intentions, and just 11 per cent felt it would have a large-to-moderate impact – with 23 per cent of those suggesting the impact would be positive.
Ian Brinkley, interim chief economist at the CIPD, said: “There is clear evidence some employers have become more cautious about hiring following the vote to leave the EU. While many businesses are treating the immediate post-Brexit period as ‘business as usual’, and hiring intentions overall remain positive, there are signs that some organisations, particularly in the private sector, are preparing to batten down the hatches.”
The survey found that 33 per cent of employers expected Brexit to have the effect of increasing their costs, and 21 per cent might reduce investment in training and skills development and equipment.
Brinkley added: “Instead of looking at cuts, now is the time to be talking about investment in people, processes and equipment that will boost productivity and improve the resilience of businesses and our economy.”
In a separate survey released two weeks ago, Totaljobs reported that 44 per cent of firms said the referendum result would not impact on their hiring.
But Sophie Adelman, head of EMEA at job board Hired, said the spectre of Brexit would cause problems – particularly among specialist sectors – if Britain is less attractive as a destination for top talent.
She said: “Uncertainty around freedom of movement, and the growing appeal of other global tech hubs in Europe, the US and Asia, will call into question whether the UK is well-positioned to fill the 750,000 new digital jobs that will open by 2020 and ultimately stay competitive in the global tech economy.”
Meanwhile, employers are being advised not to allow the fallout from the EU referendum to lead to harassment or conflict in the workplace. Advisory firm PwC told media outlets this weekend that it is advising four companies where staff have complained of being ‘ostracised’.
Ed Stacey, head of the employment team at PwC Legal, said businesses that backed one side or the other during the referendum could be at risk of legal action from staff who took the opposing view and subsequently felt they had missed out on career progression as a result.
In at least one case, the consultancy said employees who voted leave felt “victimised” by colleagues who branded them racist on Twitter and Facebook posts. He said firms needed to be aware of potential liability faced by employers under the Equality Act, where workers can bring legal claims if they feel they are being harassed for their political beliefs. “Since Brexit we have been in a state where feelings are running high,” said Stacey.