UK firms are preparing to make job cuts amid ongoing Brexit uncertainty, research has revealed, prompting concerns about the “serious” impact this could have on the wider economy.
ManpowerGroup’s latest Employment Outlook Survey found the business and financial services sector – which employs nearly a fifth of all UK workers – was most likely to be hardest hit by layoffs projected to happen in the last three months of this year.
An estimated six million people, including lawyers, bankers, architects and estate agents, work in this sector.
The projections come as parliament prepares for vote today on whether to accept Theresa May’s revised exit deal with the EU which, if voted down, could potentially leave open the possibility of a no-deal exit.
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James Hick, managing director of ManpowerGroup said: “We should be under no illusions about just how serious this is, not just for those workers directly affected, but the UK economy as a whole.
“Against a bleak backdrop of low economic growth and Brexit uncertainty, UK employers have bucked the trend and kept on hiring. The UK jobs market has been like a party that no one has wanted to leave, and the ONS recently reported a 440,000 increase in employment in the past year. However, this quarter we are seeing signs that the good times are coming to an end as several sectors have turned negative.”
Separate analysis by global information provider IHS Markit found 14 per cent of UK private sector firms expected to boost their staffing levels in February, down from 15 per cent in October 2018 and the lowest reading for six years.
The UK also had the lowest predicted spending on research and development over the next 12 months of all countries covered by the survey, with the net balance falling to -2 per cent in February.
Associate director at IHS Markit, Tim Moore, said the results were unsurprising. “With uncertainty in relation to Brexit outcomes a persistent feature of the political landscape so far in 2019, it’s of little surprise that February’s UK business outlook survey makes for grim reading,” he said.
“Growth projections hit a new survey-record low amid a slide in optimism among both manufacturers and service providers since last autumn.”
Experts have warned businesses must take the findings as a signal to begin preparing for potential workforce changes.
Patrick van der Mijl, co-founder of Speakap, urged employers to be “proactive, targeted and personal” in how they communicate the job cuts in order to avoid “panic”.
“Whether or not the employees are moved to another branch or department, no company wants to leave a sour taste in an employee’s mouth about the employee experience. And being too slow to communicate the news, or not providing relevant information to the affected employees in a timely manner, could do just that,” he said.
Van der Mijl said that when emailing affected employees, HR departments should be direct and personalised and include what details they need to know, what actions they need to take (before, during and after their jobs are cut), who they should speak with and what paperwork they may need to fill out.
Recent research by Right Management also found just 11 per cent of UK workers said their organisation clearly communicated its Brexit plans to employees, while a quarter (26 per cent) said Brexit was a taboo topic to discuss with management. Over half (54 per cent) expected Brexit to put extra pressure on their workforces.
David Duffy, general manager of Right Management, said: “It’s important to keep in mind that Brexit is a process, not an event. These might be uncertain times, but the best businesses will use Brexit as an opportunity to examine and re-assess talent strategies.
“An organisation’s success or failure depends on its people. Periods of change, like Brexit, test both company and personal resilience. Rather than inadvertently drive talent elsewhere, management teams need to proactively engage with their workforces to positively align their career and talent strategies with business objectives.
“Although workers don’t expect management to predict the future political process, they will want to know what plans are in place to navigate these and how their careers might be affected.”