New employment regulation stunting growth

Employment regulation launched earlier this year, is ‘degrading’ Britain’s standing as a business-friendly environment worthy of investment, the CBI has claimed.

According to the CBI, the Agency Workers Directive, which came in on 1 October, is forcing employers to scale back on temporary staff, and should be reviewed.

Meanwhile, small firms are leading the way when it comes to job creation, as 47 per cent of employers predict that their work forces will be larger in a year’s time.

Commenting, Dr Neil Bentley, CBI Deputy Director-General, said:

“It is encouraging that firms right across the UK are growing their workforces, especially smaller companies.

“But employers are making hiring plans on shifting sands and there is a risk the tentative private sector jobs recovery could be blown off course by fast-moving economic events at home and abroad.

“We need to be doing all we can to get the UK working, so it is worrying that changes to rules around hiring agency workers are leading to fewer openings for temps.

“There needs to be an early review to minimise the damage this directive is causing and to ensure we retain as many job opportunities as possible.”

The news comes as the CIPD Labour Market Outlook has warned of painful employment contraction, as employers’ hedge their bets during times of economic uncertainty.

Commenting, Gerwyn Davies, Public Policy Adviser at the CIPD, said: “The figures point to a slow, painful contraction in the jobs market. Many firms appear to be locked in ‘wait and see’ mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil.”