Belfast Telegraph

Home News UK

Employment recovery 'has stalled'

The recovery in employment levels has "stalled", with a growing number of employers planning to make staff redundant, according to new research.

A survey of 600 employers found that a third expected to cut jobs in the next three months, the worst figure for a year and up from one in four at the end of 2009.

The Chartered Institute of Personnel and Development (CIPD) said more public sector employers were planning redundancies than in private firms.

Gerwyn Davies, public policy adviser at the CIPD said: "The employment situation looks like a case of the good, the bad and the ugly.

"Most striking this time is that, while the number of employers planning to make redundancies is similar to that in the Spring report, this trend masks the true extent of forthcoming job losses in the third quarter of the year as the proportion of the workforce that will be affected by these redundancy programmes has jumped by 50%.

"As is being widely reported, this is being driven chiefly by public sector organisations, where redundancies will affect almost 8% of the workforce on average.

"On balance, therefore, the CIPD, like the Office for Budget Responsibility, expects employment to remain stable in the coming months. However, the medium-term employment outlook is likely to be weaker than the forecasts made by the OBR, where expectations are that employment is to increase by 200,000 next year.

"The CIPD believes that a rise in unemployment in the next two years remains a distinct possibility as the private sector recovery is offset by the 600,000 public sector job losses the Government expects over the next five years."

Alan Downey, head of public sector at KPMG, which helped with the research, added: "Managers in the public sector have woken up to the scale of the financial crisis that they face, and many are now contemplating redundancy programmes. Surprisingly, some are still intending to recruit, albeit at a reduced pace.

"In the months ahead we will see a substantial reduction in public sector headcount as the cuts begin to bite. That is the painful but inevitable consequence of the coalition government's determination to tackle the UK's massive structural deficit."


From Belfast Telegraph