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Annual CIPD Barometer Survey predicts gloomy year for jobs

The Chartered Institute of Personnel and Development (CIPD) has released its annual Barometer Report, and warns that 2009 is set to be the worst year for jobs in two decades.

The Report’s gloomy predictions, which expect job losses to total 600,000 next year, comes with news of poor pay prospects expected by UK employees in the year ahead.

According to the Barometer Survey, which reveals the opinions of 2,604 staff, more than half of employees believe they will receive less than they did last year. The survey also showed 28 per cent of respondents think they will not receive a pay rise in 2009, and two per cent expect to see a cut in their salary.

Charles Cotton, CIPD Reward Adviser, said: "With job cuts seemingly lurking around every corner and trading conditions tight, employees are realistic about their pay prospects for the year ahead. Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform. Targeting pay increases to reward superior performance, making intelligent use of non-financial rewards, and targeted investment in training and development are all ways of making limited budgets go further in efforts to weather the storm, and emerge ready to capitalise fully on the recovery.

"More than ever, this is a time where organisations need to engage in an open and straightforward communication with staff, clearly explaining the reasons for any difficult measures that will affect them. This will help preserve staff loyalty and engagement even during times when unpopular decisions need to be made."

John Philpott, Chief Economist at the CIPD and author of the Barometer Report, said: "This time last year, in the face of some scepticism, the CIPD warned that 2008 would be the UK’s worst year for jobs in a decade. It was. But in retrospect it will be seen as merely the slow motion prelude to what will be the worst year for jobs in almost two decades.

"The CIPD’s annual barometer forecast is that the UK economy will shed at least 600,000 jobs in 2009. Overall the 18 month period from the start of the recession in mid-2008 until the end of 2009 will witness the loss of around three quarters of a million jobs, equivalent to the total net rise in employment in the preceding three years. Assuming the economy bottoms out in the second half of 2009, job losses are likely to continue into 2010, in all probability taking the final toll of lost jobs to around 1 million.

"Our current expectation, based on available survey evidence and employer soundings, is that the number of redundancies will jump sharply in the early months of 2009, once employers take stock of the economic outlook. The period between New Year and Easter is likely to be the worst for redundancies since 1991.

"Similarly, the CIPD’s baseline forecast is that by the end of 2009 the number of people unemployed and actively seeking work will have increased to 2.8 million, 1 million above the autumn 2008 figure.

"In many workplaces in 2009, HR is therefore going to feel more like ER or Casualty – leastways the sweat and tears – as managers attempt to perform the organisational equivalent of emergency triage to staff traumatised by news of colleagues losing jobs, anxious that they might be next, or simply feeling hard done by because their pay and perks are being scaled back.

"Successful organisations will be those that have built the trust and engagement of their people over time, and who maintain this through open and honest communication through these difficult times, while also basing any tough decisions on staff cuts and pay restraint on individual employee performance rather than according to arbitrary criteria such as age or job title. They will be organisations that have a plan to retain genuine talent and don’t rashly cut back on investment in skills. These will also be the organisations best able to weather the storm of recession and be ready to prosper once the deluge has subsided."

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