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‘Make or break’ moment for employers – CIPD

A third of organisations are trying to avoid losing skills by keeping on more staff than they need, a new survey has shown. 

But the CIPD has warned that redundancies will have to be made if economic growth does not return soon. 

The survey of over 1,000 employers measured the net employment balance – the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease in the third quarter of 2012. 

The balance was still positive at +5, but optimism was higher in the private sector SMEs (+46) than in large private sector firms (+17), while the score for public sector firms remained negative at -36. 

According to the results, 31% of private sector firms are maintaining staff levels higher than is required by their current level of output, with 62% admitting they feel they would be forced to cut back on labour if output does not pick up in the next year. 

Gerwyn Davies, labour market adviser at the CIPD, said: “Recent falls in unemployment suggest that the labour market is on a sound footing, but a closer examination reveals that many employers are holding on to more staff than is required by the current level of demand in order to retain their skills. 

“This is a make or break moment for employers – unless growth picks up many will find that they cannot hold on to some workers any longer. 

“But there is only so long they can hold out for growth. The labour market is approaching a game-changing phase – one that could shape Britain’s capacity to compete for a generation.” 

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