subject: A 'jobs Light/pay Tight' Year For 2011? [print this page] The Chartered Institute of Personnel Development CIPD expects that 2011 will be worse for jobs than 2010. With a further increase in unemployment and a further period of below inflation pay rises the best that can realistically be expected.
The CIPDs central economic forecast is that the number of people currently in work will drop by 200,000 in 2011, with public sector employment falling by 120,000 and private sector employment falling by 80,000. Unemployment is forecast to rise to 9% (2.7 million), while average earnings are expected to increase by an annual (below inflation) rate of +2%.
John Philpott, Chief Economic Advisor to the CIPD, said "2011 will be a 'fingers crossed' year for the economy and jobs. If all goes well and the unexpectedly strong progress made in 2010 is sustained, the jobs market will be able to cope with the impact of the coalition government's spending cuts and tax increases without any significant rise in unemployment. However, things only have to turn out a bit worse than expected in the wider economy for the jobs situation to weaken, which remains the CIPD's central forecast. Either way, this doesn't mean that we are facing a return to the dire recession days of late 2008 and 2009, but nonetheless 2011 will probably feel like another year in the economic doldrums, rather than the start of a return to prosperity."
Three recovery scenarios have been set out by the CIPD:
1.Jobs light recovery.
2.Jobs loss recovery.
3.Jobs standstill recovery.
Dr Philpott continued "I expect most workers & Good News for PAYE umbrella companies for contractors will feel a squeeze in their living standards, with pay rises still relatively modest against a background of higher prices for many essential products & services and higher taxes.
A 'Jobs-light/pay-tight' year would make for a difficult 2011 for Human Resource professionals and employers. Add in the possibility of employment disputes and social discontent arising from the fiscal squeeze and public sector job cuts. It may be likely that 2011 could prove a troubled year all round for 2011.
