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Jobless total will drop if sacking made easier
UNEMPLOYMENT will fall much faster if the Government makes it easier for businesses to hire and fire employees, according to business leaders.
A survey by the West Midlands Chambers of Commerce for the first quarter of this year has revealed a slump in the number of companies taking on new workers, with manufacturers reporting increased staffing levels falling from 31 per cent in the final quarter of 2011 to 26 per cent.
Nearly half of firms were attempting to recruit but 54 per cent said they had faced difficulties in trying to take on new staff.
Mike Ashton, chief executive for Herefordshire and Worcestershire Chamber of Commerce, said: “These figures are for the most part at an extremely low level and indicate to us that companies are reluctant to take on new staff.
“We have the essential components to lead the world in many areas, such as advanced manufacturing and the automotive sectors, and we are clearly faring well. However, our economy needs to be unleashed from the straitjacket of burdensome employment laws.
“It is encouraging that the Government is looking at making it easier to hire and fire staff.
But businesses can be extremely reluctant to take on new staff when it is costly to fire them if they turn out to be unsuitable for the company involved.
“By making the employment processes easier, business will become more confident and willing to hire, thus cutting the jobless figures. Easing the ability to hire and fire will boost business.”
Figures for the service sector showed a slump to 17 per cent from 29 per cent among firms whose workforce increased.
The number of firms attempting to recruit was also down, from 38 per cent in the last quarter of 2011 to 35 per cent. Like manufacturers, the service sector, which includes financial and business services, marketing, media, hotels and catering, was struggling to recruit.
Forty-four per cent said they had experienced difficulties in recruiting over the past three months.
However, both manufacturers and services are optimistic about creating jobs, with 20 per cent of services and 22 per cent of manufacturers predicting that their workforce would expand in the second quarter of this year.
Mr Ashton said: “There is cause to be optimistic as all of the indicators are in positive figures. Inflation is no longer the biggest concern of businesses. Competition, the traditional cause of worry, has replaced inflation and suggests that the business environment is returning to health.
“This is encouraging as it suggests that economic issues and pressures that have been burdening businesses are beginning to abate.
“Many businesses appear to be in a holding position and have been for some times as they ride out the slow recovery.
“This now appears to be falling away and we expect growth to begin to pick up.”