Firms look to hold onto staff

Most UK companies are keeping staffing levels as they are as the nation drops into recession, but they are not hiring.

The Chartered Institute of Management Accountants' (CIMA) Quarterly Economic Survey reveals only three-quarters of firms predict the size of their workforce will hold steady in the coming year.

Only one in five firms cut their staffing levels in the last year.

The 0.5 per cent percentage point cut in rates yesterday and move from the government to push banks into more lending to consumers and business was welcomed.

The CIMA research shows firms plan to invest their way out of a recession, with between three-quarters of companies plan to maintain or increase spending on marketing, staff training and capital expenditure.

However, attitudes prevail that short-term survival may mean taking some hard decisions, but the CIMA is warning firms these must not conflict with medium-term goals or companies will only face further threats down the line.

Although a third of firms report sales have declined in the past quarter, a rise of 13 per cent since the research conducted in March, almost four in ten say they are likely to plateau for the next six months and over a third say they will grow.

Some 73 per cent of firms claimed they were not concerned about their company’s ability to survive the downturn. Although one in five cited some concerns just six per cent claimed to be very worried.

Ray Perry, CIMA director, offers some tips on preparing for the stormy financial water ahead.