As the UK comes out of recession, the country could see a “jobless recovery” resulting in economic growth without accompanying jobs growth, according to Dennis Turner, chief economist at HSBC.
Speaking at the Chartered Institute of Personnel and Development’s reward conference yesterday, Turner described how employers had maintained bigger workforces than they needed, in order to save on recruitment costs when things picked up again. However, this meant that these organisations would not need to recruit as the situation improves.
“What we have seen is unemployment peak very early,” Turner commented. “This could be a jobless recovery for a few years yet as employers are carrying extra labour.”
Figures released by the Office for National Statistics this month showed a marginal fall in unemployment, with the total number of unemployed people falling by 36,000 over the three months to March 2011 to reach 2.4 million.
However, despite the amount of people out of work for up to 12 months falling by 56,000, the number of people unemployed for more than 12 months increased by 20,000 to reach 850,000, the highest figure since the three months to January 1997.
Yet, overall, Turner predicted that the economy would grow slowly and argued that the country has come out of recession.
“Technically, statistically, any way you want to measure it, the recession is over. In every recovery in every recession in the past there has always been a point where the recovery stalls but it does seem that the U-shaped recovery is on track.”