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Study: 35% of UK companies considering redundancies

Study: 35% of UK companies considering redundancies

More than one-third of all employers across the UK are at least considering the possibility of implementing redundancies this year.

That is according to new research carried out by Aon Hewitt, which has established that 35 per cent of companies either plan to reduce the size of their headcount or are thinking about doing so at some point in 2013.

The global business resource company noted that, with the exception of Greece, this represents a higher percentage than any other nation analysed in the European section of its 2013 Salary Increase Survey - Winter Update.

Overall, this study involved questioning more than 2,100 employees from 395 organisations in 44 countries across the world, with the UK element of the research being focused on 255 firms from a range of different industries.

Of the 35 per cent of British companies actively considering job cuts over the coming months, in excess of 62 per cent were found to be in service-based sectors.

Meanwhile, it appears that companies globally have also become more cautious in terms of their pay awards, as the proportion of organisations planning to impose pay freezes in 2013 stands at 13.5 per cent - a marked increase on the figure of 7.3 per cent registered last year.

Indeed, around 50 per cent of firms are now setting their wage budgets based on market competitiveness, compared to the 29 per cent that intend to use business performance as their primary measure in this area.

Andrew Macleod, leader of pay research practice in the UK at Aon Hewitt, said the "high potential figure for redundancies" could be down to the fact organisations feel they "continually have to adapt and reorganise to remain competitive in what is still a volatile economic environment".

Mr Macleod went on to say there are clear signs that different sectors are using different methods to "focus on the three 'R's - recruitment, restructuring and redundancy".

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Posted by Francesca Witney