Tuesday, 23 June 2009

Employment landscape in a recession

(By Richard Holway 2.00pm 23rd June 09) We were very interested to read the results of the CBI/Harvey Nash study - Recession creates new employment landscape (you can download the complete report from this link to the CBI site)

We really are in a hole. The 271,000 fall in employment in Apr 09 is the biggest since records began and job vacancies, at 444,000, is a similar record low. The private sector has lost 286,000 jobs but, amazingly, the public sector has put on 15,000 to reach 6.02m. Surely, whatever the colour of the next Government, this cannot continue as it’s just downright unaffordable.

It’s the young unemployed that worries me – particularly with my Prince’s Trust hat on. At 16.6%, the unemployment rate amongst the 18-24 year age group is the highest since 1993.

Around 55% of employers intend to freeze pay. Nearly two-thirds of employers have frozen recruitment. Here graduates face a really tough time with 40% freezing graduate recruitment and 10% recruiting even fewer than in 2008.

45% have increased flexible working (ie reducing hours) among staff to reduce costs. A further 24% are considering or intending to increase flexible working. A third of employers have cut their use of agency staff, while 43% have reduced paid overtime.

None of this is helped by the 23% of organisations planning to transfer work overseas in response to the UK's downturn. Science, Hi-tech and IT are the worst affected where 54% have either moved jobs, or are intending or considering doing so.

Albert Ellis, CEO of Harvey Nash, said:

“The recession has led to fundamental changes in the way employers recruit, motivate and develop employees, and UK plc must act fast to keep highly skilled talent in the UK labour market. Otherwise, we run the risk of conceding our competitive edge (talent) to other countries.

“Without a more proactive approach to training, accommodating and retaining talent, businesses risk missing out on the next generation of skills needed to compete. We have a wealth of knowledge, experience and skills in the UK that must be nurtured and developed, even in troubled times, for the future of the British economy.”

Absolutely. In IT, if British graduates don't get entry-level IT jobs we won't get the Project Managers or Network designers in 5-10 years time. The UK will cry 'skill shortage' and even more will be sourced offshore. A viscious and really quite dangerous situation.

When will it end?

Not soon. 53% think it will take up to two years or more for recruitment levels to return to 2007 levels.

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