The effect of the credit crunch is beginning to have a real impact on the headcount of firms outside the financial sector, new research has revealed.
A survey of finance directors at 100 listed and owner-managed firms, conducted by financial services provider Baker Tilly, found that organisations adjusted their outlook on the UK economy downwards during March, with heavier focus on cutting costs in the light of an expected drop in earnings.
The number of companies considering cutting their costs nearly doubled during March, increasing from 26% to 45% by the start of April.
One-quarter of respondents highlighted headcount as the greatest area for potential cost savings, with 15% considering redundancies, and 10% are looking at changing their remuneration policies.
And one-third of respondents believe that the UK economy will only recover in 2010 and beyond, compared to one-quarter in the earlier survey.
Laurence Longe, national managing partner at Baker Tilly, said most businesses are now considering tightening their belts within the tough market conditions.
“We are in a period of uncertainty and companies are focusing more attention towards internal controls and assessing external risks,” he said.