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One in three firms plan to restructure

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One in three employers expect to restructure their businesses over the next 12 months, research from the Recruitment Confidence Index (RCI) has found.

As a consequence, many of those companies also expect the size of their workforce to reduce, and recruitment to slow down, or stop entirely.

The RCI measures employers’ recruitment expectations and business confidence. The RCI’s autumn figures, which draw on responses from 1,189 public and private sector employers, show that among companies who have no plans to restructure, but who expect a change in the size of their workforce, 21% believe it will go down. This figure doubles to 42% among employers who are planning to restructure and who expect a change in the size of their
workforce.

Commenting on the findings Professor Shaun Tyson from Cranfield School of Management, which produces the research data, said restructuring was not a sign of business failure: “We sometimes assume that businesses should always survive in the same form. Our findings show that UK firms are becoming more flexible and responsive to their markets.”

Employers with restructuring plans are also expecting turnover and recruitment difficulties to rise – with 81% predicting recruitment problems, compared with 72% of employers with no restructuring intentions.

Stephanie Richards, Recruitment Research Manager at the Daily Telegraph said: “In previously buoyant times, restructuring occurred when business was good. Now firms are restructuring in response to their falling share prices and simply to survive and remain competitive in an increasingly tough business climate.”

Other findings in this quarter’s survey show that although there is uncertainty among UK employers, business conditions remain remarkably stable – with 39% of employers saying there will be no change in their recruitment activity over the next six months and 44% expecting their workforce numbers to remain level.

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