Rising number of employers expecting to make more redundancies next quarter, finds CIPD/KPMG report ñ public sector worst hit
Growing employer confidence has not been enough to deter more employers planning redundancies in the coming quarter, which in turn could bring a further rise in unemployment when Mayís jobs figures are announced, according to Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD).
Dr Philpottís comments are based on the findings of the CIPD/KPMG quarterly Labour Market Outlook ñ a survey of over 1,000 employers examining recruitment, redundancy, pay and other key labour market indicators.
Key findings from the CIPD/KPMG Labour Market Outlook reveal:
Overall, employers are more confident about the future ñ with a 12% positive balance of employers expecting to be employing more staff in one yearís time (34%) over those expecting to be employing fewer (22%); the remaining 43% expect the total number of employees to be about the same in a yearís time.
Employers expecting to make redundancies in the next quarter, broken down by sector:
Private sector services ñ 22%
Manufacturing and production ñ 27%
Voluntary sector ñ 28%
Public services ñ 34%
All employers ñ 27%
The figure of 27% for all employers expecting to make redundancies in the next quarter represents a notable increase ñ up from 25% in the last quarter and an average of 22% recorded during 2005. The figure of 34% of public sector employers expecting redundancies compares to 26% when the same question was asked this time last year.
Dr Philpott said:
ìRising employer confidence is unlikely to be enough to prevent further rises in unemployment. Despite growing expectations of overall increases in staffing levels, over a quarter of employers (27%) expect to be making redundancies in the next quarter. Recruitment intentions are also only improving gradually.
ìPart of the explanation lies in an apparent hoarding of labour during last yearís slight dip in the economy by employers mindful of the difficulties in recruiting in the UKís persistently tight labour market. This led to a slump in productivity last year. Employers now appear to be responding to the emerging recovery by trying to boost productivity by getting more from existing staff, rather than hiring new people.
ìThe good news is that rising joblessness still seems to be cyclical, rather than structural, and should be reversed once the economy recovers further.î
Highlighting differences in redundancy intentions between sectors, John Philpott added:
ìEmployers in the public sector are the most likely to be making redundancies, further underlining the extent to which the old ëjob for lifeí in the public services is being consigned to history. In contrast, only 22% of private sector service providers are expecting to make redundancies.î
Rising number of employers expecting to make more redundancies next quarter
Finds CIPD/KPMG report ñ public sector worst hit
