UK employers are scaling back on all employment-related operations; with fewer organisations planning to offshore jobs abroad and recruit overseas workers against a backdrop of less recruitment and fewer redundancies. This is the key finding from the Chartered Institute of Personnel and Development’s autumn Labour Market Outlook report, a survey of more than 1,000 employers.

The employment situation will deteriorate further in the fourth quarter of 2011, with the Labour Market Outlook net employment index having fallen to -3 from -1 in the past three months. This is the second successive quarterly fall and the lowest net balance since last winter. Medium-term prospects are no better, with the twelve-month index also recording -2.

Employers also seem to be hedging their bets on all employment-related decisions in response to the current economic uncertainty: hiring intentions and redundancy intentions have fallen across all sectors compared with recent previous reports.

The proportion of firms intending to hire migrant workers, which has risen steadily in recent consecutive quarters, has also fallen to 19% from 25% during the past three months. Meanwhile, the proportion of firms planning to offshore jobs to other parts of the world has also decreased to 6% from 10% in the past year. India remains the most popular destination for offshoring, with half of employers surveyed planning to locate some or all of their operations in India. The functions most likely to be offshored are finance and accounts and IT support.