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Annie Hayes



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Redundancy gloom as employment prospects weaken


Yet another survey is predicting redundancy misery for thousands of workers as recruitment activity falls.

The latest quarterly Chartered Institute of Personnel and Development (CIPD) and KPMG Labour Market Outlook (LMO) survey shows employment prospects are weaker that at any time since the survey began four years ago.

Although the survey finds that more than one in four employers expect to increase staff levels in the third quarter, this represents a sharp drop from 37% in the second quarter and is by far the lowest third quarter LMO figure recorded since 2004.

The number of employers planning redundancies increased from 22% to 27% between the second and third quarter LMO surveys. A similar picture was reported by KPMG’s quarterly National Business Confidence Survey which showed that more than half of Britain’s businesses are planning on making job cuts.

Of the KPMG findings, Kylie Coulter, a solicitor at Thomas Eggar’s employment team, told that since the end of 2007, the firm has seen a definite increase in the amount of redundancy advice it has given:

“Individuals also seem to be less averse to bringing claims, as in the current economic climate finding a new job is not an easy task. The lack of employment opportunities also means that the amount which a successful claimant is likely to recover is greater, adding to the attraction of bringing a claim. To compound matters, claimants seem less willing to settle prior to issuing a claim as they have less money available and therefore cannot afford to make a significant compromise.

“This triple whammy is likely to have led to a significant increase in tribunal claims and we anticipate that this will continue for the foreseeable future.”

Pay expectations also remain modest despite higher price inflation. Employers carrying out staff pay reviews in the third quarter expect average increases of 3.7% (3.9% when bonus payments are included).

John Philpott, chief economist at the CIPD, said: “The jobs market has been one of the few bright spots in the UK economy, but cracks are appearing in the face of an increasingly uncertain economic outlook. Even if we avoid the scale of jobs fallout suffered in previous downturns, the era of the candidate’s recruitment market is already over, with people in work becoming increasingly anxious that their P45 might soon be on its way.”

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Annie Hayes


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