UK businesses are scaling back the hiring of new staff as companies seek to increase productivity levels instead of staff numbers.

The number of companies looking to employ new staff has fallen to the lowest levels since 2010, according to a new survey by the Chartered Institute for Personnel and Development (CIPD).

Instead businesses are moving to enhance productivity levels, with current productivity levels having failed to rise with the improving economic climate, as limited pay rises hamper productivity.

Just over half of respondents surveyed in December said they planned to recruit, compared to 65 per cent in the previous quarter. In turn nearly three quarters of respondents said they would be providing pay increases.

CIPD labour market adviser Gerwyn Davies, said: “Weak productivity partly explains why a majority of employers expect to continue awarding below inflation pay rises for their workforce".

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