Redundancies ease but jobs market still in poor health

The era of redundancies has now eased, but the UK jobs market is no closer to returning to proper health, latest figures have revealed.

According to the Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook (LMO) survey for autumn, UK employment prospects will deteriorate less slowly in the final quarter of 2009 than at any time since the start of the recession in spring 2008.

But the quarterly survey cautioned that the relative improvement was taking place against a backdrop of much reduced pressure of demand for labour.

The survey found employers’ intentions to recruit were well below pre-recession levels, and plans for staff pay rises and changes to hours of work showed no sign that the labour market was close to recovering.

Gerwyn Davies, public policy adviser at the CIPD, said: “The UK jobs market remains flat on its back. Things aren’t anywhere near as bad as they were earlier in the year when redundancies spread through the economy like a virus.”

The survey of more than 700 employers recorded a negative balance of -3% between the percentage of employers expecting to hire more staff in the three months to December 2009, and the percentage expecting to employ fewer.

This was an improvement on the -19% and -10% figures recorded in the spring and summer LMO surveys respectively – mainly due to a fall in the proportion of employers planning to make stuff redundant compared with earlier in the year.

The report also found that the jobs outlook was on course to deteriorate further in the private sector – namely in manufacturing and production with a negative balance of -21%. However, prospects were more buoyant in private sector services at +11%.

Reduced working hours and modest pay rises were a further symptom of a weak overall demand for labour, the report said. Expectations about the next basic pay rise fell to a record low of 1.5%, down from 1.7% three months ago.

The study also showed that around a sixth of organisations had put in place reduced working hours arrangements for at least some of their staff during the past year, and a similar proportion said they would ask staff to work shorter hours in the next 12 months to September 2010.

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