Employer confidence in hiring has taken a sharp hit, with 32% of businesses planning to cut jobs through redundancies or reduced recruitment. The latest CIPD survey of 2,000 UK employers shows hiring confidence has fallen to its lowest level in a decade, outside of the pandemic.
Upcoming increases in employer National Insurance (NI) and the national minimum wage from April are adding pressure. 90% of organisations expect higher employment costs due to NI changes, with 43% seeing a significant impact. Reducing the employer NI threshold from £9,100 to £5,000 concerns 40% of businesses, who are expecting costs to rise sharply.
Employers planning to reduce staff levels in the next three months have risen from 11% last quarter to 16%. In response to higher costs, 42% of businesses plan to increase prices, while 24% are scaling back investments. Training budgets are also under threat, with 19% reducing spending despite its benefits for productivity and skills shortages.
The net employment balance, which measures hiring intentions, has dropped significantly. Retail has seen the sharpest decline, falling from +23 to +1. Hospitality and construction have also taken a hit despite Government infrastructure plans.
Despite the downturn, a third of employers still report hard-to-fill vacancies, particularly in accountancy, education (49% experiencing shortages), and construction (46%). This mixed picture highlights ongoing hiring struggles alongside growing economic pressures.
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