Demand for redundancy advice soars
3 Dec 08
The number of businesses and employees seeking online advice on redundancies, lay-offs and business restructuring has quadrupled since May as fears over job losses have spiralled, Acas, the advisory and conciliation service, reported on Tuesday
The Financial Times reports that further evidence of the mounting concern over staff cuts emerged as a survey of more than 400 recruitment companies warned the jobs market was “heading downhill at breakneck speed”.
The fall in permanent and temporary job appointments in November was the biggest monthly decline since the survey by the Recruitment and Employment Confederation and KPMG began 11 years ago.
The increase in the number of people looking for work was also a series record as was the fall in job vacancies and drop in permanent and temporary salaries.
“These figures confirm that the jobs market has hit the wall,” said Kevin Green, REC chief executive.
Redundancies announced this week included 650 at bankers Credit Suisse and 500 at HSBC.
Luxury carmaker Aston Martin also plans to shed up to a third of its workforce or about 600 jobs as “a result of the unprecedented downturn in the global economy”.
The outlook seems set to deteriorate further with Acas reporting more than 15,000 visits a week to its website in November from people seeking “guidance on redundancy issues”. This compared with 4,000 visits weekly in May. Calls to the advisory service’s telephone helpline also rose by 12 per cent over the same period.
Tougher employment laws, driven by European Union directives aimed at stemming age, racial, gender and religious discrimination and introduced in the past decade, have sent employers rushing to contact legal advisers before they start shedding staff.
Helplines run by employment lawyers and by the EEF, the manufacturing trade association, have reported similar increases in the number of calls from employers seeking advice on how to make staff redundant and reduce working hours without falling foul of labour laws. Ed Sweeney, who chairs Acas, said: “Given the challenging economic environment, these figures are not surprising. We are urging businesses to resist any knee-jerk reactions and ensure that decisions are assessed well ahead of being made.
“Thinking about the longer term or looking at alternatives to redundancy, such as redeployment, are just two areas where businesses may be able to save jobs and money in the medium-long term.”
Mike Stevens, head of business services at KPMG, said the latest findings from the recruitment industry left no doubt that the UK jobs market was “heading downhill at breakneck speed”.
Employment legislation meant that it would take longer “to make large numbers of permanent staff redundant”, he said. Employers as a result were “shedding contract and temporary staff as fast as they can”. The hardest hit areas were housebuilding, motor retailers and other retail areas involving larger levels of discretionary spending. But it was “inevitable that all but the most resilient areas of the economy will follow suit before long”, said Mr Stevens
Vacancy levels had fallen in every area “with only the nursing/medical/care sector avoiding the downturn”, said REC/KPMG.
With the number of people looking for work continuing to surge, fewer employers were reporting skill shortages. This was in marked contrast to the trend in recent years when employers regularly complained they were unable to hire sufficient skilled staff.