The labour market is set to see an end to 10 months of positive hiring intentions by employers following a dip in productivity and growing fears of a recession, according to a new report.
Business advisory firm BDO said the labour market is at a “turning point”, with recessionary fears expected to put downward pressure on employment as hiring intentions start to fall.
Soaring energy costs have added to a decline in business output and productivity, leading to a fall in confidence among companies.
Kaley Crossthwaite, a partner at BDO said: “We’re already seeing the impact of a challenging environment, with many businesses forced to make cuts and in some cases consider whether the business will continue to be viable.
“Soaring energy costs and inflationary pressures are headwinds we can expect to become more severe in the coming months, exacerbating the economic and political uncertainty both firms and consumers feel this winter, particularly as we await the first signs of a fall in employment figures and a recession approaches.”
Separately, four out of five low-paid workers say the cost-of-living crisis is the worst financial period they have ever faced.
More than half of 2,000 workers surveyed by the Living Wage Foundation said they have used a food bank over the past year, with many paying more visits in recent months.
The foundation said almost half of low-paid workers now regularly skip meals and nearly a third are unable to heat their homes due to financial reasons.
Research has shown that almost a quarter of all workers have had to take out a payday loan to cover essentials, said the report.
Living Wage Foundation director Katherine Chapman said: “Everyone is feeling the pressure from soaring inflation, but our polling shows that low-paid workers are being hit harder than most, with well over half using food banks in the last 12 months.
“It’s more important than ever that those employers who can, step up and provide a wage based on the cost of living, joining over 11,000 Living Wage employers across the UK.”
The Living Wage Foundation will next week announce new rates for the voluntary Real Living Wage, which is higher than the statutory minimum.
The current rates set by the foundation are £11.05 an hour in London and £9.90 outside the capital, compared with the statutory adult rate of £9.50.
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