Gloom surrounds British employers’ hiring plans after recent tax hikes and surging uncertainty in the global economy, according to surveys on Monday that chimed with the Bank of England’s forecasts for a weakening labour market.
The Chartered Institute of Personnel and Development, a professional body for human resources, said its gauge of employment intentions for the next three months fell in the latest quarter from +13 to +8 — a record low, excluding the COVID-19 pandemic.
The CIPD’s survey of 2,000 employers has run since 2014.
Large private-sector employers — which account for roughly half of all private-sector employment, according to official data — drove the drop in the latest quarter, the CIPD said.
A separate survey from accountants KPMG and the Recruitment and Employment Confederation showed another drop in job placements by recruiters last month, albeit less than in March. Overall demand for staff, however, contracted at a faster pace.
Both surveys reinforced the picture of a cooling labour market, emphasised by the BoE last week as it cut interest rates. It remains concerned about the strength of wage growth as a source of inflation pressure.
First-quarter official data due on Tuesday is likely to show annual wage growth of nearly 6%.
The CIPD survey showed annual pay settlements, which are typically somewhat lower than headline pay growth, holding at 3% in the latest quarter — below the 3.5%-4% range for settlements which BoE staff had found during recent company visits.
“Employer confidence is low which is being reflected in their hiring plans,” said James Cockett, senior labour market economist at the CIPD.
Jon Holt, group chief executive of KPMG, said the slight easing of the downturn in recruitment signalled in the REC report did not amount to “green shoots” as the number of job-seekers continued to rise.
“This is unsurprising. With businesses facing several pressures due to current global economic uncertainty and rising costs, it is unlikely to lead to a sudden turnaround in the market in the near term,” Holt said.
A gauge of employment from accountants BDO which aggregates previously-released business surveys fell to a 12-year low in April.
(Reporting by Andy Bruce; editing by David Milliken)
