Over two thirds of businesses believe economic unpredictability triggered by Covid-19 and Brexit will be a major challenge in 2021 with varying impacts depending on the sector concerned, according to the latest survey by the employer body Ibec.

However, the Ibec HR Update 2020, which explores pay and human resources trends, finds that despite the current adverse circumstances over a quarter of firms surveyed - 28% - plan to hire more staff next year, a finding described as "very positive".

On pay, Ibec highlights a growing gap between firms and households which are doing well and those which face "significant" falls in income due to the pandemic.

The research exploring trends for 2021 found that 49% were planning wage increases, with a further 49% intending to freeze pay.

It also indicates that remote working, a trend accelerated by the pandemic in recent months, will trigger long-term changes in almost a third of organisations surveyed.

Ibec said that this form of flexible working will continue "by necessity" into next year in line with public health guidance but will present both opportunities and challenges.

Among the concerns of respondents were collaboration within teams, the impact on innovation and employment rights issues.

The survey forecasts that in firms where remote working is suitable, hybrid working will be the most common arrangement by September 2021.

Overall, on-site working will remain the most common work arrangement and, on average, respondents expect 60% of their workforce to be working fully on site this time next year.  

Business continuity planning or crisis management were main human resource priorities over the next 12 months, reflecting the climate of uncertainty.

"Hiring freezes, accessing the government wage subsidy scheme and pay freezes are the most common steps identified by respondents to achieve essential reductions in costs and wage bills in the months preceding this report," the report states.

Ibec's Director of Employer Relations Maeve McElwee acknowledged that businesses were experiencing both positive and negative impacts on their trading performance across different sectors, as the economy tries to function against the backdrop of uncertainty caused by the pandemic, combined with the approaching outcome of Brexit.

"From the sudden lockdown of the economy in March, resulting in office workers moving to remote working, essential services adapting to meet new and necessary protocols, and for some, to the difficult challenge of having to lay-off or reduce the hours of their employees it has been a testing time," she said.