Kehinde Adegoke | Reuters
London: Faced with rising costs from the Labour government’s new employment reforms, more than a third of British employers plan to cut permanent staff hiring, putting fresh strain on the jobs market, a survey has revealed.
The Chartered Institute of Personnel and Development (CIPD) warned that overall hiring intentions are at their lowest level on record outside the first year of the COVID-19 pandemic, raising fears that the recruitment slowdown could deepen.
The Labour government’s Employment Rights Act, enacted in December, imposed stricter rules on sick pay, zero-hours contracts, and union rights. Although protections against unfair dismissal for new workers eased, CIPD said three-quarters of employers expect increased costs, and over half anticipate more workplace conflict.
The government estimates reform costs at £1 billion ($1.4 billion), but CIPD argues actual costs are higher, including policy updates, staff communication, and manager training. Median pay awards remain at 3% for the seventh consecutive quarter, highlighting employer pressure.
The CIPD survey, conducted from December 18, 2023, to January 16, 2024, and involving 2,082 employers, reveals an urgent problem: reforms intended to strengthen worker protections may instead be accelerating a hiring freeze, putting Britain’s labour market in immediate danger of prolonged weakness.
