Economic slowdown hits recruitment activity

| August 11, 2008 | 0 Comments

A survey has revealed that job losses are set to increase.

According to a survey of 1,200 British companies, carried out by KPMG and the Chartered Institute of Personal Development (CIPD), less than a third plan to recruit staff between July and September, compared with 37% in the period April to June.

Furthermore, the number of employers planning redundancies has risen from 22% to 27% over the same period.

The report noted that the slump in recruitment is particularly worrying because the current quarter is normally strong on the back of the wave of recruitment usually experienced in September.

However, the housing slowdown, rising fuel costs and falling consumer confidence has meant that employers are having to cut costs.

The economic slowdown has had a major impact on the financial and property sectors, with housebuilders slashing thousands of jobs over recent times.

John Philpott, chief economist at the CIPD, said generally the jobs market has been one of the strong areas in the UK economy, however, cracks are appearing due to an uncertain economic outlook and reports of a forthcoming recession.

People in employment are becoming extremely anxious about their future job security, added Mr Philpott.

Andrew Smith, KPMG’s chief economist, said the employment market is looking less resilient and companies are now reacting to weakening market conditions.

The latest UK unemployment figures put the jobless rate at 5.2%, with 1.62 million unemployed.

Meanwhile, the number claiming unemployment benefit increased by 15,500 in June to 840,100, this represents the highest rise since December 1992.

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