According to research conducted by the Chartered Institute of Personnel and Development (CIPD), many businesses are choosing to ‘wait and see’ what happens in the economy, before hiring more staff. So what are commercial property lease owners waiting for?
They CIPD research, which involved respondents from 1000 employers found that many businesses were seeing what developments happened in the public sector, before making any recruitment decisions. This way, many businesses felt that they would reduce the amount of redundancies in the long term.
Speaking of the employment market, Gerwyn Davies, Public Policy Adviser at CIPD, stated: “Many firms appear to be locked in ‘wait and see’ mode, with some companies scaling back on all employment decisions. The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility”
“There is no immediate sign of UK labour market conditions improving in the short or medium term,” Mr Davies added.
However, although the employment rate is down in the UK as a whole, the level has also fallen by six per cent in terms of outsourcing the work overseas and hiring migrants, as Mr Davies expressed, “The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad.”
Unemployment levels are at their highest since 1994, with a whopping total of 2.48 million, in which approximately one million of those are aged between 16-24 years old. This means that over one in five under 25 year olds are currently unemployed. So why is the figure so high?
Although employing younger people is generally cheaper for employers, they often require more training and on a whole are less productive than hiring someone who has more work experience. Professor John Van Reenen, Director of the Centre for Economic Performance at the London School of Economics, expressed that this issues is: “A long running problem, rather than something that has just happened.”
Will employment levels rise anytime soon? Not according to CIPD, who believe the situation will only get worse with the euro crisis, as Mr Davies, put across that there is: “Increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil.”
Also with the fact that the government itself is cutting public sector jobs, it just adds to the situation, as the ‘thinktank’, stated: “Call a halt to public sector job cuts while the economy and labour market remain in the current fragile condition.” However, the treasury argues that with the risks in the economy at the moment, it is essential that the government sticks to its reduction plan.
The recession has been going on now for a number of years and shows no signs of improvements anytime soon. So for now, it looks like unemployment figures will continue to flutter up and down for a number of years to come. But hopefully commercial property owners and people in charge of recruitment will continue to give both young and older people a chance of being employed.
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