CIPD ‘RedundancyWatch’ suggests high rate of redundancies set to continue into second half of 2009

02 July 2009

New data from the Chartered Institute of Personnel and Development (CIPD) shows that the proportion of HR professionals seeking advice on how to make staff redundant barely changed between the first and second quarters of 2009, suggesting that redundancies are set to continue at a high rate into the second half of the year.

An analysis of around 15,000 calls made to the CIPD’s legal helpline each quarter - released as part of the CIPD’s ongoing ‘RedundancyWatch’ series - finds that the proportion of enquiries related to redundancy fell by only a single percentage point between Q1 (19%) and Q2 (18%). This compares with 12% for the second quarter of 2008; itself at that time a very high figure in comparison with previous years which the CIPD correctly identified as a leading indicator of the avalanche of redundancies that subsequently hit the jobs market.

Dr John Philpott, the CIPD’s Chief Economist and Public Policy Director, will today tell delegates at the CIPD’s annual Employment Law conference in Church House Westminster, that the helpline statistics serve as a reminder that any signs of ‘green shoots’ of economic recovery won’t provide early relief for people anxious about their jobs. And in examining the extent to which businesses have been seeking welcome alternatives to redundancies – such as pay freezes, pay cuts or reductions in hours of work - Philpott cautions against drawing conclusions about the extent to which the current recession is different to previous recessions:

“Our CIPD Helpline data offer little comfort that there will be any significant let up in the redundancy rate in the next few months, though we remain hopeful that the first quarter will prove to have been the worst for redundancies in this recession and that the situation will start to look better by the end of the year.

“There is considerable encouraging survey and anecdotal evidence of co-operation between employers and staff to seek alternatives to redundancy in the current recession. However, looked at from a macroeconomic perspective there is insufficient data to enable a firm conclusion to be drawn on whether this recession has resulted in proportionately fewer redundancies than previous recessions. Moreover, with 300,000 redundancies recorded in the first quarter alone and, as our helpline data suggest, more on the way throughout the remainder of the year, one should probably avoid putting too positive a spin on the impact of this recession on the workplace.”

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