IoD press release Government must use Budget to restore employer confidence in hiring
Commenting on this morning’s release of ONS labour market data, Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:
“Today’s figures show that the labour market is continuing to soften, with the number of payrolled employees down by 26,000 on the month (145,000 on the year) and vacancies down 8,000 on the quarter (36,000 on the year).
“The IoD’s own data paints a similar picture, showing that more business leaders expect to reduce headcount over the coming year than increase it. While a subdued economic outlook and weak business confidence are important factors, employers are also grappling with a series of policy changes that have increased the cost and risk of hiring. These include the Employment Rights Act, above-inflation increases in the National Living Wage, and higher employer National Insurance contributions.
“The new Government’s recognition that the cost of business crisis needs to be tackled is welcome. However, as set out in the IoD’s Budget submission, this rhetoric now needs to be backed up by tangible steps to bring down the cost of employment and restore employer confidence in hiring. These include:
1. Exempting employers with fewer than 250 employees from trade union access provisions.
2. Increasing the planned reference period for the entitlement to guaranteed hours to 52 weeks and set the low hours threshold at eight hours.
3. Avoiding increasing the National Living Wage beyond two-thirds of median income in order to protect entry-level jobs.
“Without meaningful action in next month’s Budget to reduce the cost and risk of employment, there is a real danger that labour market condition will continue to weaken, with employers remaining unable to create new jobs.”
