Even civil servants face the axe, says CIPD

Not even 'safe' public sector jobs will survive the slump in employment, the CIPD warns.

Last Updated: 31 Aug 2010

More gloomy news on unemployment from the Chartered Institute of Personnel and Development today: the institute is expecting the job market to keep shrinking for at least the next three months, as employees in the public and voluntary sectors start joining their private sector counterparts in the dole queues. And the bad news for civil servants is that although the private sector is expected to bounce back before too long, the public sector is likely to be hammered for years to come...

The CIPD reckons the outlook for the next quarter is pretty grim, judging by the results of its latest survey (of 500 employers). The number of companies planning to make redundancies still outstrips the number of companies planning to recruit, suggesting that the unemployment figure is only going to get higher - despite recent signs that sentiment may be improving. And even those who do keep their jobs shouldn’t expect any pay rises: apparently one-third of all private sector firms have no intention of hiking salaries at all this year, while the rest are all planning smaller rises than in previous years. (That’s bad news for the economy, too, as we’re less likely to splash out on buying goods and services.)

But none of this will probably come as a great surprise: it's been well-documented that the private sector has borne the brunt of the big spike in unemployment thus far, as many firms have cut jobs and costs to try and stay afloat (or in some cases, just to protect their bottom line). What’s interesting about these figures is that they show the contagion is finally spreading to the public and voluntary sectors – traditionally seen as a much safer haven. Charities are having to make cuts as donations dry up, while local councils have really been feeling the pinch: the Local Government Association reckons 7,000 jobs have gone in the last six months.

Unfortunately for public servants, it’s only going to get worse. With the budget deficit spiralling out of control, it’s clear that whoever’s in Government will be putting a serious squeeze on public spending. Some areas (like health and education) may escape, but most departments will be forced into painful cuts to get budgets down. This means public sector employment will deteriorate even as private sector jobs recover - indeed, as the CIPD’s John Philpott says, ‘The current figures for the public sector will look like a walk in the park as the drive to balance the books gets under way in earnest.’

Some may argue that this is not before time; that the public sector needs to lose some flab. But tell that to the newly-unemployed...

In today's bulletin:

Centrica goes nuclear with bargain BE stake
Even civil servants face the axe, says CIPD
HSBC banks record investment banking revenues
Price trouble brewing for coffee drinkers
MT Expert's Ten Top Tips: Blogging for business

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