Major lay-offs loom as businesses implement cost cutting measures, report finds
A survey of 350 organisations, conducted by HRLocker, reveals almost one in three (31%) UK organisations plan to make employees redundant as part of their cost containment strategies over the coming six months.
In addition to redundancies, other scheduled cost saving measures include recruitment freezes (43%), lay-offs (37%), reduced working hours (31%), pay-cuts (23%) and office downsizing (20%). Just 34% of respondents stated they would not be introducing any form of cost containment strategy.
Adam Coleman, CEO at HRLocker, comments, “With the country already slipping into deep recession and Brexit round the corner, the impending jobs crisis could potentially eclipse those of the 2008 financial crisis. Government needs to take decisive action immediately to support businesses and workers, going far beyond those recently outlined by the minister for finance.
“HR must play a crucial role in helping organisations navigate through the unprecedented challenges they face, automating mundane, administrative tasks so they can focus on the people within their firms.”
Businesses are struggling
These cost containment measures are indicative of the sustained negative impact the pandemic and subsequent lockdowns have had on organisations’ revenues. 74% of respondents said they were finding the sales impact very or extremely challenging; up 18% on an HRLocker survey conducted in May.
The research also shows employers are divided on whether to re-open their offices. Even before the announcement of the Level 3 National Lockdown, just over half (51%) of businesses had started bringing employees back into the workplace, while 37% expressed that they will not begin doing so until the crisis subsides and/ or testing is broadly available.
A major worry about reopening for employers is the risk of liability over coronavirus related claims and the potential for lawsuits if workers contract the virus. 60% of all respondents expressed they were at least somewhat concerned, with 25% of those stating it was a major concern. That’s despite the fact that 83% of business leaders claim to have put in place formal plans and procedures to manage Covid-19 exposures in the workplace and situations where employees are showing symptoms.
Moreover, there has been a notable spike in the number of companies struggling to manage employee stress, with 54% stating it has been very or extremely challenging – up 14% since May.
Digital Paradox
Ironically, despite planning to reduce staff numbers and halt talent acquisition, 53% of respondents indicated they plan to recruit talent before the end of 2020, with roles in IT (61%) and sales (44%) the most in demand.
The high demand for IT skills reflects the significant shift to digital working models adopted by organisations. 85% of the executives surveyed stated that the pandemic had accelerated their digital transformation. This is only likely to accentuate Britain’s IT skills shortage, which has been extensively reported in recent years.
“We need a bold and aggressive national strategy, that focuses on apprenticeships and reskilling workers, encouraging employers to retain and retrain employees by meeting their changing talent needs. Anything less will lead to a lost Covid generation, with those from less advantaged backgrounds suffering most’ adds Coleman.
