Thursday, 11 March 2010

Employment outlook in UK set to drift

According to a News Release from CIPD - The Chartered Institute of Personnel and Development on the 5th March 10, Employment outlook in US and UK set to drift in polar opposite directions, with public sector cuts weighing UK recovery down, according to a comparison of two leading surveys by CIPD.

The release says that on the day when the latest US jobless statistics are released, the Chartered Institute of Personnel and Development (CIPD) compares its own recent quarterly Labour Market Outlook (LMO) survey of over 700 employers with a similar US survey by the Society of Human Resource Management (SHRM). The findings show that while US employment levels are set to gather pace, UK levels will continue to decrease for the first quarter of 2010.

The sharp fall in employment intentions in the UK public sector accounts for the difference, with net employment intentions falling to -33% (the difference between the percentage of employers expecting to employ more staff in the first 3 months of 2010 and the percentage expecting to employ fewer) in the public sector. The fall will have a disproportionate effect on female employment prospects - until now women have fared better in the recession, as they make up a far higher proportion of the public sector workforce than they do that of the private sector.

Across all sectors, the UK survey records a negative balance of -5%. This represents a modest fall compared with the -3% figure recorded in the previous quarter's report. In contrast, the US LMO records a positive balance of +11%, compared to +6% in the previous quarter, which is the most positive figure since the US version of the survey began a year ago.

The Society of Human Resource Management's (SHRM) US LMO survey, based on the same questions as the UK report, finds that around one in ten (12%) US employers plan to cut jobs in the first quarter of 2010. This marks a dramatic reversal from the first quarter of 2009, when almost three-quarters (73%) of employers planned to make job cuts. The improvement is much less marked in the UK, where the number of organisations planning to make redundancies has fallen from 40% in the first quarter of 2009 to 28% in the same period this year.

Gerwyn Davies, CIPD Public Policy Adviser comments: "Our comparison of the US and UK surveys show that employment prospects in the public sector will quite considerably weigh down the UK jobs market.

"With a greater proportion of UK workers employed in the public sector, the jobs market in both countries looks set to drift in polar opposite directions as hundreds of thousands of public sector job cuts are made in the next few years. This will have a greater impact on women than men, who make up more than a third of the total public sector workforce compared to just one-sixth of the private sector, and until now have benefitted hugely from the rapid expansion of the public sector since 1997. As a result, the next few years may see the worst employment prospects for women in a generation."

Key statistics:

• Just over a fifth (21%) of the UK workforce is in public sector employment, whereas 17% of the US workforce is in public employment.
• The number of people in public sector employment in the UK was 6.09 million in September 2009, up 23, 000 from June 2009 and up 910,000 from 1997.
• The number of people in private sector employment was 22.82 million, up 15, 000 from June 2009 and up 1.19 million from 1997.
• More than a third (35%) of the public sector workforce was made up of women in the fourth quarter of 2009. Around one in six (17%) of the private sector workforce was made up of women over the same period.
• According to the latest comparable official statistics, the US unemployment rate was 10% while the UK unemployment rate was 7.8% in the three months to December 2010 Source CIPD

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