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CIPD finds employers cautious about recruitment post Brexit vote

Employers in the UK are more cautious about taking on staff following the recent referendum result that will bring about exit from the EU.

That's the conclusion of the latest Labour Market Outlook from the Chartered Institute of Personnel and Development (CIPD), which is produced in partnership with Adecco Group.


It suggests that the number of UK employers expecting to take on staff has dropped by 4% (from 40% before the referendum to 36% after the result was announced). And 21% of employers say they are planning to reduce their investment in training and skills.


According to the CIPD, the data is based on "UK employer sentiment in the two weeks before and two weeks following the EU referendum", which shows that UK employers where more optimistic about recruitment before the result was announced. The survey also found that 33% of respondents expect Brexit to increase their costs, while only 4% think it will reduce them.


Ian Brinkley, Acting Chief Economist at the CIPD, said: 

"There's clear evidence that some employers have become more cautious about hiring following the vote to leave the EU. While many businesses are treating the immediate post-Brexit period as 'business as usual', and hiring intentions overall still remain positive, there are signs that some organisations, particularly in the private sector, are preparing to batten down the hatches."

Brinkley believes that the "softening of the British pound" and "expectation of further weakness in the currency" as the UK waits to find out the terms of its EU exit has led to a third of employers expecting their costs to increase in the coming months, which is why they're considering cutting investment in "crucial areas like skills development and equipment".


But Brinkley described this reaction as premature. 

"The economy had positive momentum going into the referendum and there's a risk that employers will create a self-fulfilling prophecy if they overreact because they're expecting a downturn," he added. Instead of cuts, he believes that "now is the time to be talking about investment in people and in processes and equipment that will boost productivity and improve the resilience of businesses and our economy."

The Labour Market Outlook also considered the impact of the Brexit decision on the UK's migrant workforce and how employers are likely to respond. Almost two thirds of respondents (62%) currently employed people from elsewhere in the EU. A fifth of these thought that some of their employees from elsewhere in the EU were already considering leaving the UK in the next 12 months. Two-fifths of employers believe Brexit will make it harder for them to recruit workers from elsewhere in the EU in the next 12 months.

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