A quarter (26%) of UK organisations said they are likely to make redundancies in 2023, according to new research from HR consultancy Ayming UK.
Half (49%) also said they were expecting to cut costs this year and 37% of organisations were reducing recruitment.
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Scott Ward, people, performance and development partner at Ayming UK, said that the hiring market has reached a crossroads.
Speaking to HR magazine, he said: “Employees had the pick of roles last year whilst the economy was buoyant, but now organisations are having to make high levels of redundancies as the economy bites back.
“The findings reflect the fact that organisations hired to meet capacity as opposed to hiring for the long term and to meet their own skill gap needs.”
Employee packages will be negatively impacted, with 29% of firms likely to reduce benefits and 27% likely to freeze pay in 2023.
As employers undertake such money saving measures, Ward said they must communicate honestly and humanely with their employees.
He said: “Whilst benefits may be shrinking, employers now have the opportunity to increase their empathetic based leadership whilst also establishing a framework which incorporates the thoughts and contributions of all their employees.
“We completely sympathise that for the past three years or so, simply existing has been the main motivator for many organisations, but now, if they really want to increase their performance, their people must be at the centre of their aspirations.”
Perry Timms, founder of HR consultancy People and Transformational HR, said employers making redundancies must be mindful of the wellbeing of those who are made redundant, as well financial compensation.
Speaking to HR magazine, he said: “The handling of harsh redundancies en masse reeks of the commoditisation of people and ignores the trauma and life-upturned experiences of job loss. It’s a time when sensitivity and support should usurp processes.”
Employers must be communicative about their aims if they want to maintain company culture through redundancy rounds, he added.
He said: “Show the financial gaps you’re trying to close. At times of adversity like this, we need true transparency and togetherness, not fear and secrecy.”