Re:locate magazine | Reports & Surveys | Sharp rise in expected redundancies signals jobs slowdown

The recently published CIPD/KPMG Labour Market Outlook (LMO) survey shows a sharp rise in the proportion of employers expecting to make at least some staff redundant in the coming months, suggesting that tougher economic conditions are starting to bite in the UK jobs market. The survey of 1,553 employers shows that almost two in five (38%) intend to make some employees redundant this quarter – a sharp increase on the autumn 2007 LMO survey figure of 17%, and the highest quarterly figure for redundancy intentions since the LMO survey began in 2004. The average quarterly figure for redundancy intentions is 21%, which compares with a seasonal winter average of 22%.

A quarter of employers expecting to make redundancies this quarter report that at least 10 staff will lose their jobs. Thirty seven per cent expect to make fewer than 10 people redundant, with the remainder uncertain of the numbers likely to be involved.

Redundancy intentions have increased in all sectors since the autumn 2007 survey and are strongest in the public services where almost half (48%) of employers surveyed expected to make at least some staff redundant this quarter. Redundancy intentions are highest in the East Midlands (47%), the West Midlands (45%) and the South West of England (45%). The Celtic fringe looks set to be the least affected in the next three months, with around a third of organisations in Scotland (33%), Wales (35%) and Northern Ireland (36%) planning redundancies; redundancy intentions in England are lowest in Yorkshire and Humberside (34%).

For more information, see www.cipd.co.uk.

And while we’re on the subject…

The latest official labour market statistics, published recently by the Office for National Statistics (ONS), show that the UK jobs market was performing remarkably well in the final quarter of 2007. But says John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD), a number of conundrums surround the ONS figures. “What is surprising is that the ONS figures show no sign whatsoever of the softening in demand for staff identified by various recent independent employer surveys, including the CIPD/KPMG Labour Market Outlook survey [see above]. The apparent conundrum might be explained by the normal lag between turning points in economic activity and the eventual labour market fall out. But it might also indicate that the jobs outlook isn’t so bleak after all. Let’s hope for the best – but don’t be too surprised if things soon start to take a turn for the worse.

“Taken at face value the ONS figures suggest that most new jobs at present are going to people aged 50 and over – this age cohort accounts for almost 6 in 10 of the additional people in work last year. But this sits oddly with the observation that most new jobs are being taken by migrant workers – a group overwhelmingly aged under 40.”

The CIPD reckons this can be explained by the fact that migrant workers are taking the lion’s share of new job vacancies while older workers are instead better able than in the past to hold onto their jobs. In jargon terms, over 50s employment is rising because of increased job retention not increased hiring of older workers. What this also highlights is that home grown workers, not just those from overseas, have benefited from the jobs boom of recent years. It remains to be seen which groups will fare best when the jobs market next enters tougher times.

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