A grim warning that 2008 will be the worst year for employment since Labour came to power in 1997 has been sounded by the Chartered Institute of Personnel and Development (CIPD).
Higher fuel and food prices will squeeze incomes over the next few months, combining with the financial services credit crunch to threaten recession and redundancies.
“For seasoned human resources professionals, 2008 may evoke memories of tougher times,” said the CIPD’s chief economist John Philpott. “Those whose experience doesn’t stretch back to before the economic stability of the past decade will have their first taste of seriously choppy business water.”
Job creation in the private sector will fall throughout the year, according to the CIPD, while redundancies will continue in the public sector.
It predicts that 75,000 more people will be in work at the end of 2008 than at the start. But this is just a third of the growth seen in each of the previous two years, and masks swathes of redundancies.
“This will present a challenge to those HR professionals who have not had to walk the tight rope of laying off large numbers of people while ensuring that people who keep their jobs remain committed and motivated,” said Philpott. “Many HR professionals will be dusting off redundancy manuals in the coming months to rediscover best practice on trimming staffing levels.”
He added a word of warning for HR departments to be careful about which staff they selected for the axe.
“Unlike previous bouts of large-scale job shedding in the early 1980s and early 1990s, which tended to fall relatively heavily on older staff, redundancy practice in 2008 will have to take care not to fall foul of age discrimination legislation,” Philpott said.
TUC cautions against economice confusion
TUC general secretary Brendan Barber has warned employers not to talk themselves into thinking the economic situation is worse than it is. “Employment remains at record levels, and businesses say they are optimistic for the year ahead,” he said.
“The greatest threat would be to confuse the difficulties now being suffered by banks with the economic fundamentals.”
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