Three quarters of employers are planning to freeze recruitment due to the economic downturn, new research has revealed.

The research, from employment lawyers Peninsula, revealed that two out of three firms would not rule out making workers redundant.

Peter Done, managing director at Peninsula, said: "Employers have had to put a hold on recruitment as the credit crunch bites. It is understandable that businesses want to be in good shape coming out of this economic uncertainty and so redundancy just cannot be ruled out.

"Employers must ensure they approach redundancy in a sensitive way and ensure they follow legal regulations to avoid ending up in court. Bosses must also keep their employees in the loop with what is going on. Obviously there will be many worried workers, so employers should make it clear to their workers what their intentions are."