Jobs: Employment market in a ‘sorry state’

JOBS market watchers forecast that some 2.85million people, or 8.8 per cent of the workforce, will be unemployed by the end of 2012.

Friday, 20th January 2012, 4:45 pm

Figures released earlier this week by the Office for National Statistics show unemployment has risen to 2.68 million people, up 118,000 on the quarter.

Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD), said: “With total unemployment and youth unemployment still on the up, with growth in average earnings very subdued, and with a region like the North East now registering a 12 per cent unemployment rate, it’s clear that the UK jobs market is in a very sorry state.

“It now looks likely that the level of unemployment at the end of 2011 will have reached 2.7 million, which was the CIPD’s forecast this time last year. There is nothing in these latest jobs figures that makes us feel any more optimistic about our forecast for this year, which points to 2.85 million (8.8 per cent) by the end of 2012.”

The CIPD adds that the rise in unemployment was smaller than in the three months to October and there has also been a ‘slight’ increase in the number of people in work (up 18,000), and a small fall in long-term unemployment (down 10,000 to 857,000). But the CIPD picture overall remains one of increasing fragility and the jobs situation is set to get much worse in 2012.

Dr Philpott added: “The small rise in employment masks another sharp fall (down 109,000) in the number of employees. This is once again partially offset by a rise in self-employment (up 101,000), though this consists largely of part-time ‘odd jobbers’ and should be viewed as a sign of labour market weakness rather than strength. Moreover, employment overall increased only because there were more unpaid family workers and more people employed on government schemes. In total, full-time employment has fallen while part-time employment has increased.”

Carmen Watson, managing director of Pertemps Recruitment Partnership, said: “Although there has been a boom in temporary employment over Christmas, this is the time when the greatest challenge will be presented to the job market as many industries enter a quieter period. Retail in particular has taken a battering at the start of the year with the failure of high street stores bringing about job losses.

“The key step to reviving the employment picture is focussing on enhancing skills and considering roles in industries where there is still a call for talented, hard working people. This will require a greater deal of flexibility on the part of applicants and an amenable, yet determined attitude. Jobs are still out there but in many situations they may be in areas you might not have thought of.”

Jon Pulford, area director for Lloyds TSB Commerical in Northants, Bucks, Beds & Herts, pointed to an increasing number of start-up businesses: He said: “Faced with real economic uncertainty, many businesses and organisations are cutting back on staffing levels. However, there’s an important trend that is taking place despite the current difficulties - a real growth in the number of start ups.

“Over the past two years, the number of start ups across the UK has grown by more than 20 per cent. These businesses are set up by people looking for an alternative to employment or as a route out of unemployment and either way that secures a job or creates a vacancy. If they go on to expand, they then create jobs for others.

“These are clearly early days, but we know that the start ups of today are the large employers of tomorrow and with the right support such enterprises could help fuel the recovery.”