Half a million jobs could be lost in the UK by the end of next year as a result of the spiralling economic crisis, the Chartered Institute of Personnel and Development has warned.
John Philpott, the institute’s chief economist, told Personnel Today that last week’s events in the US had ended any chance of our labour market recovering in 2009.
In a grim assessment of the credit crunch’s unfolding impact, he said: “Next year is going to be rough. We had thought that the jobs market might start to recover next year, but this delays that a bit.
“We could be looking at 2.25 million people unemployed by the end of next year.”
Unemployment stood at 1.72 million in July, according to the Office for National Statistics.
But Philpott said the UK would be hit by a double whammy as the escalating credit crunch continued to restrict the money available. Consumer spending and organisational investment would both fall he said, severely reducing demand for staff.
“This is not just a banking crisis,” he warned. “It affects us all pretty big time.”
HR is likely to be as affected as any other profession when the axe starts to swing, according to Philpott.
“There may be a brief fillip in HR numbers, as some organisations will need staff to make sure they are compliant with redundancy regulations and so on, but that will then fall back,” he said.
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“If organisations expose a degree of HR inefficiency then it is in their interests to cut back – but if they cut back too much on strategic HR, that will damage their survival chances.”
