UK Job market stable, fewer companies plan to downsize in final quarter

Fewer companies plan to downsize, with a 3 percentage point fall compared to the same Quarter last year, according to research published today by recruitment group Reed (Monday 14 October 2002).

Over 800 organisations across the UK were surveyed for the latest Reed Recruitment Index. While demand across the UK job market is holding steady, the number of companies planning to downsize over the Fourth Quarter fell from 10 per cent in 2001 to 7 per cent.

This is the lowest figure since Reed first asked this question four Quarters ago. It shows less organisations planning to downsize in the wake of recent stock market falls than immediately following the events of September 11th last year.
Predictions by Quarter Organisations Planning to Downsize
4th Quarter 2002 7%
3rd Quarter 2002 9%
2nd Quarter 2002 9%
1st Quarter 2002 10%
4th Quarter 2001 10%

Overall, the job market remains stable at the moment with 48 per cent of organisations recruiting to replace staff and a third, 33 per cent, of organisations planning to recruit to grow. As a result, the overall recruitment demand has fallen by just 1 percentage point from last Quarter, when the proportion of organisations planning to recruit to grow was 34 per cent.

Sector Variations
Across the sectors that were surveyed the organisations that were planning to downsize the least were construction, retail and finance. Only 3 per cent of organisations in each of these areas are planning to reduce staff numbers, followed by only 6% of organisations in manufacturing and distribution/wholesale.

Interestingly, redundancies are predicted to be slightly higher in services and the public sector. The worst hit sector, following the advertising downturn, has been publishing and media where downsizing is predicted to affect 13 per cent of organisations.


Regional Variations
The northern and western regions continue to out-perform London, East Anglia and the Thames Valley. The South West and Wales are both showing strong growth with 54% and 42% of organisations planning to recruit to grow respectively. The Thames Valley remains the weakest area with just a quarter of organisations hoping to recruit to grow before the end of the year.


James Reed, Chief Executive of recruitment group Reed, comments:
ìThe job market appears to be holding steady overall with only a one per cent drop in recruitment demand this quarter.

ìPlans for redundancies have fallen to their lowest level since this time last year. Indeed, plans to downsize are 3 percentage points lower than immediately following the incidents of September 11th last year. In spite of stock market volatility, it looks like organisations have reached a stable level of recruitment demand but are biding their time before resuming growth.î



Notes
.812 organisations were surveyed in September 2002 by Reed. 39% were small organisations of up to 100 staff, 37% medium sized with 101 ñ 1000 employees and 21% large organisations with over 1000 staff (4% not stated).

Reed, the UKís leading recruitment group, offers a combination of on and offline services with over 250 branches and 2000 specialist consultants across the UK and Ireland, fully integrated with reed.co.uk, the job site that attracts more than half a million unique visitors a month.

Reed is listed on the London Stock Exchange as Reed Executive PLC.