Industry group warns strength of job market could fade soon

Ben Southwood
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FIRMS are holding onto staff they don’t need, due to worries that making skilled staff redundant could backfire on them should growth return, said a report released today.

However the same study forecasts businesses will lay off workers soon if the economic picture fails to brighten up,

Companies intend to boost staffing over the third quarter, the report by YouGov at the Chartered Institute of Personnel and Development (CIPD) said.

On balance, five per cent of firms planned to increase their rolls, with particular optimism in small and medium enterprises, but pessimism in the public sector.

But some 31 per cent of firms reported that their staff levels were higher than required by their production over the last year, with 62 per cent of them putting this tendency down to maintaining their skills base.

“The tenacity with which employers are hanging on to skilled labour is a reflection of the high value they place on it and the damage they fear will be done to their businesses if they are forced to start making more redundancies,” said Gerwyn Davies at CIPD.

“The spare capacity implied by the research suggests that firms are ready to increase their output quickly if demand grows – but there is only so long they can hold out for growth,” Davies added.