UK recruitment freeze shows no sign of thaw

KPMG research reveals the UK employment market will continue to get tougher

Market watcher KPMG has painted a bleak outlook for the UK employment landscape as recruitment freezes continue to grip the nation.

Figures from its quarterly National Business Confidence Survey revealed that 76 per cent of respondents were seeking to freeze their recruitment drives. In addition, 64 per cent said they were actively cutting headcount to reduce business overheads.

Robert Bolton, people and change advisory partner at KPMG, said: “Engaging the workforce while taking cost out particularly when staff will feel insecure regarding their own job security and long-term prospects is one of the biggest challenges that many business leaders face.

“It’s clear that with so much uncertainty in the market, the old mantra of ‘cut once, cut deep’ is harder than ever to sell to employees who are often fearful of waves of redundancies. This means that the way in which business leaders articulate their business’ long term journey is even more critical than before.”

Additionally 73 per cent were keen to take action to better motivate their employees, but 10 per cent indicated they were prepared to look to transfer jobs overseas indicating that businesses remain committed to the UK workforce.

One of the most import people issues faced by 60 per cent of respondents is the increase in the flexibility of the workforce with firms potentially looking to introduce reduced working weeks or sabbaticals for employees. However, interestingly, while less than half felt the cost of employment was a key concern, most felt that the percentage rate of wage rises would increase over the year.

A total of 76 per cent of those surveyed recognised the need to attract, retain and invest in human capital will increasingly be viewed as an important source of competitive advantage in the long-term.

Bolton said: ““It is clear that business leaders have to balance a number of conflicting demands in assessing how best to make cost savings. Business leaders need to be seen as a calm hand on the tiller in the midst of the storm. Slashing the sails might seem a quick route to stability but won’t build the crew’s confidence that they will get back to land once the storm has passed.”