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More Than a Fifth of Employers Planning Redundancies

Written by: Keith Tully

Updated: 18th May 2020

Redundancy sticky notesMore than one in five employers across the country are planning to make redundancies in the coming months, according to a new piece of research.

The government’s furlough scheme has saved many thousands of jobs since the onset of the coronavirus crisis but a high proportion of organisations are nonetheless intending to make cutbacks within their workforces.

According to the Chartered Institute of Personnel and Development (CIPD) and the recruitment group Adecco, around 22 per cent of UK employers are planning for redundancies in the three months to July.

Meanwhile, hiring intentions are at their lowest levels recorded since the CIPD first started surveying employers on the subject in 2005, with only 40 per cent planning to increase their headcounts this quarter.

By comparison, in winter 2019/2020, survey figures showed 66 per cent of respondents were planning to hire more staff if they could find the right people.

The government’s Job Retention Scheme, which covers the costs of paying furloughed workers up to 80 per cent of their wages and a limit of £2,500 per month, has seen very widespread take up among employers across a broad range of sectors.

According to the CIPD’s polling, employers that have engaged with the scheme would have made 35 per cent of their staff redundant, on average, if they had not been able to access it.

Clearly the government-backed furlough scheme has saved huge numbers of jobs and while there are expectations of an increase in redundancies in the current quarter, the rise is expected to be much slower than it might otherwise have been.

The CIPD’s data shows a 6 per cent increase in the number of employers planning to make redundancies between the first quarter of this year and the second.

“Recruitment activity has fallen significantly, but it’s positive to see that redundancy intentions have increased only modestly compared with the previous quarter,” said Adam Fleming from the Adecco Group.

“Organisations are doing all they can to keep employees in work, from reducing working hours, freezing hiring and cutting training budgets.

“As workplaces adapt to the new normal, it’s important that businesses take cohesive action to shape the future of work for the better.”

Keith Tully

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Keith Tully
Partner

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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