More than a quarter of UK organisations say they are likely to make redundancies in 2023, according to research from Ayming UK, the consultancy specialising in HR performance.

As the UK experiences evolving economic problems, organisations are having to tighten their belts, with half (49%) expecting to cut costs this year.

These cuts are inevitably spilling into employee packages, with 29 percent of firms likely to reduce benefits and 27 percent likely to freeze pay in 2023.

However, one of the most significant impacts is to hiring practices. In contrast to the buoyant job market of the last couple of years, 37 percent of organisations are reducing recruitment while 26 percent say they are likely to make redundancies in 2023. These findings match up with the growing reports of redundancies, particularly among large technology firms.

There is a motivational decline in the UK

The research uncovers a staggering fall in motivation among UK workers, with 89 percent of firms reporting a decline in motivation and engagement over the last three years.

 An overwhelming majority of organisations (62%) are positive about remote working. However, Ayming argue there is a ‘Work Connection Deficit’ and people are significantly less connected to colleagues than before.

“This reflects a significant shift in the employee-employer relationship. Whereas 2022 saw employees in an unusual position of power as firms battled for talent, 2023 is seeing a reversal of this dynamic. This puts employers on a collision course with their staff. The job buoyancy of the last two years means employees expect more money and a better work-life balance. But the downturn in the job market makes it harder for those expectations to match up to the reality,” says Scott Ward, Partner, People, Performance and Development at Ayming UK.

The role of automation is increasing

Beyond cost cutting, automation is also playing a role in the shake-up of the employment landscape, especially with the recent launch of artificial intelligence like Chat GPT. According to the research, 30 percent of organisations expect to introduce AI/automation that will replace jobs in 2023.

“Artificial Intelligence is starting to have a tangible impact. Chat GPT has already been a force for disruption, but that will likely accelerate as businesses learn how to harness it. Although this might contribute to redundancies in some areas, it could equally improve work life, making tasks more efficient and allowing people to focus on more rewarding work,” says Ward.

What about the four-day week?

AI’s ability to improve productivity could also strengthen the case for a four-day work week, which has gathered momentum recently following the success of several pilot projects. Ayming’s research finds that almost two-thirds (64%) of organisations support a four-day week. However, this will inevitably increase if AI allows people to do the same amount of work in fewer hours.

“The case for a four-day week was already strong, but AI could really seal the deal for workers and trigger a widespread transition to a shorter work week. Although there is some level of anxiety about AI’s impact on labour needs, I’m confident job roles will adapt, and automation will take on a lot of the more mundane tasks that people currently have to do. That said, people need to be aware that there are a lot of questions on how a four-day week would work in practice. Perhaps most importantly, there will be an inevitable trade-off with the flexibility that many now depend on,” says Ward.

Offering your employees initiatives is important

As well as support for the four-day work week, organisations are increasingly open to new ideas. Many are reviewing working practices and introducing a range of initiatives that intend to help people overcome modern challenges and find purpose.

A staggering 73 percent of firms support the introduction of volunteer programmes, 72 percent support providing financial guidance to help employees manage the cost-of-living crisis, 72 percent are in favour of offering childcare solutions, 70 percent support providing therapy for employees, and 63 percent even support helping employees onto the property ladder.

“This makes me happy to see. Some of these benefits could have a really positive impact on people’s lives. The concept of employment is gradually changing as people’s expectations change and it’s fantastic that businesses are working with their HR teams to create programmes and support structures that go beyond the perks we found had been introduced in last year’s report,” adds Ward.

 

 

 

 

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Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.