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Businesses set to cut headcounts in 2012
HR News |
14/02/2012
UK private sector employees have been warned to expect more redundancies during the first quarter of 2012.
According to the Chartered Institute of Personnel and Development (CIPD), Q1 will be the most difficult quarter for the jobs market since the recession of 2008-09.
The organisation's latest quarterly Labour Market Outlook survey of more than 1,000 employers has indicated that more businesses will be shedding workers in early 2012.
CIPD's net employment balance, which measures the difference between the proportion of employers intending to increase total staffing levels and those that plan to decrease their headcounts, has fallen from -3 to -8 since the autumn 2011 quarter.
This is the report's worst figure since spring 2009, suggesting difficult times may lie ahead for some UK employees.
The report shows that worsening overall employment prospects are almost entirely accounted for by a drop in confidence in the private sector during the past three months.
CIPD also found a further widening of the north-south divide in job prospects, with London the only region in the UK to register a positive score.
Gerwyn Davies, public policy adviser at CIPD, said that whereas employers were in 'wait and see' mode three months ago, more private sector firms have decided to push the redundancy button in response to worsening economic news.
"This will exert yet more pressure on a jobs market that is buckling under the strains of contractions in economic growth and public sector employment," he stated.
"The fear is that these existing pressures, which include a widening chasm between the employment prospects of those in the north and the south, will become greater still if business conditions do not improve in the next few months."
With many employers telling CIPD that access to finance has been a big factor in preventing them from creating new jobs over the last two years, the labour market case for government action to increase the availability of credit to businesses is stronger than ever, Mr Davies stated.
"The prospect of more redundancies in so many firms also poses significant management challenges which businesses need to address urgently," he added.
Mr Davies said business leaders need to focus attention on communicating and consulting with staff to build trust and employee engagement in uncertain times.
"Employees are likely to respond more positively to change, and even to the threat of redundancies, if they feel that they have a voice in the workplace and that senior leaders listen to their views before taking decisions," he added.
Posted by John Lynes
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