Unemployment looks set to jump – a new survey shows 24% of New Zealand employers are looking to shed permanent staff in the next three months.

The latest Hudson Report, Hiring Expectations, has returned the worst result since the survey began in 1999.

It shows a net negative effect of 11.3% for the April to June quarter, which means that 11.3% more employers are planning to reduce staffing levels during that period rather than increase them.

This represents a substantial drop of 19.2% from the previous Hudson survey.

The worst affected industry is tourism and hospitality with a net negative result of 43.8%.

Manufacturing is next at -32.2%, reflecting the continuing contraction of New Zealand’s manufacturing sector, while retail (-28%), telecommunications (-25.4%) and wholesale (-18.2%).

Employer confidence has fallen around the country, with all regions reporting negative sentiment.

Hiring confidence is worst in the upper North Island, having dropped 18.7% to -15.9%, while the South Island is at -12%.

The lower North Island is slightly better at -2.4%, although the public sector isn’t providing much of a cushion: hiring expectations among public sector employers have dropped 21% to -6.3%.

Large businesses are being hit hard: a net 13.2% intend to reduce staffing levels, a 23.1% drop since the last survey.

A net 11.5% of medium sized businesses and 6.7% of small businesses are also planning staffing reductions.

Contractors aren’t faring much better than permanent staff: a net 14.1% of businesses intend to reduce their contracting/temporary workforce.

“With cost and demand pressures on businesses mounting, some employers have had to rapidly reassess their workforce strategies,” Marc Burrage, executive general manager at Hudson says.

“We are seeing some employers talking to their employees about reductions in salary levels or offering flexible working practices, such as job sharing, to help retain the talent they’ve worked so hard to develop while also addressing the current financial challenges they face.”