6,341 job losses are imminent in the UK Employment Agencies industry next year, according to the 1st Edition 2002 Plimsoll Portfolio Analysis. The analysis found far more fundamental ìbusinessî reasons for these job losses that go back long before the last few months of economic uncertainty.
The findings reveal that for the last 3 years the cost of employing people has been increasing at a greater rate than the industry has been able to afford. The cost of salaries has increased by 60%, yet sales have only risen by 56% in the same period.
80% of companies are spending more on salaries then they were 3 years ago yet just over half are making more profit. A fifth of the companies are already loss making. Further pressure for job cuts will be brought on by next yearís expected salary increases. The analysis suggests that next year average salaries will increase from 29,133 to 30,467, a rise of 4.6%.
A staggering 36% of the companies included in the analysis could not absorb next yearís salary increases, as they simply cannot afford to pay.
David Pattison, senior analyst of Plimsoll, ìThere is little doubt that managers will use the current economic and market conditions to make decisions frankly they should have made 18 months ago.î
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Uncertain climate not to blame for job cuts - 12/2001
1st Edition 2002 Plimsoll Portfolio Analysis