Employers 'more cautious' on hiring post Brexit, survey says

UK employers have become more cautious about hiring new staff following the vote to leave the EU, a report claims.

The proportion of employers expecting to increase staff over the next three months dropped from 40% ahead of the vote to 36% after it, according to a survey by HR body the CIPD and Adecco.

It said the fall was "significantly sharper" among private sector firms.

"There has been a clear deterioration in hiring intentions... as a result of the Brexit vote," the report said.

The CIPD said the survey's results suggested post-Brexit economic forecasts of a marked downturn in the labour market next year would be proved right.

"While many businesses are treating the immediate post-Brexit period as 'business as usual', and hiring intentions overall still remain positive, there are signs that some organisations, particularly in the private sector, are preparing to batten down the hatches," said CIPD acting chief economist Ian Brinkley.

'Wait and see'

Recruitment agency Adecco chief executive John Marshall said employers appeared to be taking a "wait and see approach".

"Uncertainty around Brexit is making employers nervous. This caution seems sensible but unless employers want to see their growth stymied, they need to take proactive steps," he added.

The survey was based on responses from 726 HR professionals between 10 to 23 June and 618 HR professionals between 8 to 17 July.

Other surveys have also suggested that the outcome of the EU vote has had an impact on employment.

The latest Report on Jobs, produced monthly by IHS Markit, which collects data from 400 UK recruitment and employment firms, found permanent placements in July fell at the sharpest rate since May 2009, with participants citing uncertainty caused by Brexit.

Earlier this month, the Bank of England said it expected the unemployment rate to rise to 5.4% next year and 5.6% in 2018.