‘Jobless economic recovery’ fears as public sector squeeze begins

Job market conditions improved again in May, but growth of permanent places slowed, reinforcing fears that forthcoming public sector cuts may lead to a “jobless recovery”.

The latest Report on Jobs, based on an analysis of data from 400 UK recruitment and employment consultancies by the Recruitment and Employment Confederation (REC) and professional services firm KPMG, found that job vacancies continued to grow last month, but at a slower rate than before.

This, coupled with public sector recruitment freezes, led the report to warn of a “jobless recovery”, and a lost generation of workers where jobseekers currently training will find it impossible to get on the job ladder.

The report also found that the availability of permanent staff fell slightly for the first time in more than two years. It identified a number of jobs where suitable candidates are in high demand but short supply, including HR professionals, public relations professionals, accountants, software developers and chefs.

While wages and salaries rose again in May, the report found that these too grew at a weaker pace than in previous months. Permanent staff salaries increased for the seventh month running, but growth eased from April’s 25-month high.

Kevin Green, REC chief executive, said: “We remain concerned about the overall employment outlook as public sector recruitment freezes start to bite.

“With fewer opportunities in the public sector and jobs growth in the private sector improving only very slightly, predictions of a jobless recovery are looking more likely. In this environment, there are real fears for the one million young people not in work or training who will find it increasingly difficult to get on the job ladder. [It] underlies the need for urgent action if we are to avoid a ‘lost generation’ of workers.”

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Bernard Brown, partner and head of business services at KPMG, added: “While demand for staff from the private sector remains strong in some areas, the figures suggest that hiring activity in the public sector has started to slow down.

“This doesn’t come as a surprise since the new government has now begun to spell out where the axe will fall. Many public sector employers will have imposed embargoes on recruitment at least until we get more details of further cuts in the emergency Budget on June 22.”