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Redundancies on the up!

  16th February 2011      
 CIPD, Company News

Redundancies are set to increase “sharply” in the next few months, according to this quarter’s Labour Market Outlook net employment index from the CIPD and KPMG — A survey of 750 employers which measures the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease total staffing levels.

The job market had a positive outlook in 2010 however redundancy intentions have now risen to their highest levels since they began across the whole economy, so are we heading for a relapse in the job market?

The Labour Market Outlook net employment index has fallen to -3 from +11 in the past three months, with further understanding that 52% of employers intend to make job cuts in the first quarter of 2011.  The public sector are making the most cuts, as two thirds of public sector organisations said they will be looking to reduce their workforce size in the first quarter of 2011. These results indicate that employment levels are heading for a fall at the start of 2011, but what is the outlook for the rest of 2011?

The report’s 12 month index which has a longer-term prospective on recruitment and redundancy has fallen to -9 from +1, with one in three employers saying they are unlikely to recruit as many staff as they would like in 2011 as a result of the Comprehensive Spending Review.  However once again it is the public sector to make the most cuts, as three quarters of local government employers plan to make redundancies throughout the year.

To add to the stress within employment, there are also expectations that wages are set to decrease.  Basic pay expectations have fallen to 1.3% from 1.5% during the past three months. Average pay settlements in the public sector are expected to drop to -0.33% which compares with 2.3% in the private sector.

Yet it’s not all doom and gloom as it is insisted that the private sector will increase recruitment levels, specifically within the manufacturing and private sector services, bringing that glimmer of hope to the 2011 employment picture.

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