CIPD Forecasts expects job market to weaken in 2011

The Chief Economic Advisor at the Chartered Institute of Personnel & Development, John Philpott, said that “2011 will be a ‘fingers crossed’ year for the economy and jobs. If all goes well and the unexpectedly strong progress made in 2010 is sustained, the jobs market will be able to cope with the impact of the coalition government\’s spending cuts and tax increases without any significant rise in unemployment. However, things only have to turn out a bit worse than expected in the wider economy for the jobs situation to weaken, which remains the CIPD\’s central forecast. Either way, this doesn\’t mean that we are facing a return to the dire recession days of late 2008 and 2009, but nonetheless 2011 will probably feel like another year in the economic doldrums, rather than the start of a return to prosperity. Even if 2011 turns out to be a ‘jobs light’, rather than ‘jobs loss’ or ‘jobs standstill’ year, the chances are that the bulk of any new private-sector jobs will continue to reflect the experience of 2010, with part-time and temporary jobs in the majority. Moreover, most workers will feel a squeeze in their real living standards, with pay rises still relatively modest against a backdrop of higher prices for many essential products and services and higher taxes. A ‘jobs light, pay tight’ year would itself make for another challenging year for employers and HR professionals. Add in the possibility of employment disputes and social discontent arising from the fiscal squeeze and public-sector job cuts, and it\’s not hard to conclude that 2011 could prove to be a troubled year all round.”

REC JobsOutlook Survey shows positive signs

The latest Recruitment and Employment Confederation (REC) JobsOutlook survey recently revealed that although many employers are remaining cautions with regards to recruitment early on in 2011 many expect to add to their permanent and temporary workforce over the course of the year. The survey revealed that many UK employers are taking a cautious approach to the early part of the year following the recent increase in VAT (from 17.5% to 20%) and looming public sector job losses.

Key JobsOutlook Figures:

  • 21% of employers said that they will be adding to their headcounts during the course of 2011
  • 74% said that they plan to keep their workforce numbers static in 2011
  • 5% intend to reduce their permanent and temporary headcount during the course of the year
  • 95% expect to grow or keep their permanent headcount the same over the course of the next 3 months
  • 32% plan to grow their agency workforce over the next 12 month
  • 20% intend to increase their temporary staff within the next three months

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