2008 ‘worst year for jobs in a decade’ forecasts CIPD

28 December 2007

In its annual end of year barometer report on the state of the workplace and the outlook for employment, published today, the Chartered Institute of Personnel and Development issues its gloomiest forecast for the UK labour market in a decade.

The report’s author, John Philpott, Chief Economist at the CIPD said:

“We forecast a net rise in total UK employment of 75, 000 (0.25%) in the year to December 2008, only a third of the rise recorded in both 2006 and 2007, resulting from a combination of much reduced net hiring in the private sector and net job reductions in the public sector. This would be the worst year for jobs this decade and easily the worst since the Labour Government came to power in 1997.

“In the early part of the decade periods of slower growth in private sector employment were masked by relatively rapid growth in public sector jobs. A downward trend in public sector employment in the past two years has in turn been more than offset by rising numbers of private sector jobs. But 2008 will be the first year for a decade that the engine of job creation will be spluttering right across the economy.

“With higher fuel costs and food prices set to raise the cost of living in the first half of the year the squeeze on real incomes experienced by many workers in 2007 will continue to bite in 2008. With jobs also harder to come by this could reinforce the impact of the economic slowdown, possibly necessitating bigger cuts in interest rates than currently anticipated to head off the threat of recession and a worrying prolongation of the slowdown into 2009.

“For seasoned HR professionals 2008 may evoke memories of tougher times - those whose experience doesn’t stretch back to before the economic stability of the past decade will have their first taste of seriously choppy business water.

“Despite a considerable amount of organisational restructuring in the past decade large scale redundancies have been running at historically low levels. This is likely to change in 2008 with more HR professionals having to deal with the particularly tricky task of handling compulsory redundancies. This will present a challenge to those HR professionals that have not had to walk the tightrope of laying-off large numbers of people while ensuring that people who keep their jobs remain committed and motivated.

“Many HR professionals will be dusting off redundancy manuals in the coming months to re-discover best practice on trimming staffing levels. But unlike previous bouts of large scale job shedding in the early 1980s and early 1990s, which tended to fall relatively heavily on older staff, redundancy practice in 2008 will have to take care not to fall foul of recently introduced age discrimination legislation.”

ends


Notes to editors:
• John Philpott is available for interview.

• The Chartered Institute of Personnel and Development (CIPD) has over 130,000 members and is the leading professional institute for those involved in the management and development of people.


Press enquiries:
Robert Blevin / Gerwyn Davies / Hannah Smith / Meera Vohora
CIPD Press Office
151 The Broadway, London SW19 1JQ
Tel: 020 8612 6400
Mobile: 07793 256 763

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