PAYE umbrella contractors may be encouraged by a new report from the Chartered Institute for Personnel and development (CIPD) which forecasts robust job creation in the private sector. The CIPD’s latest quarterly Labour Market Outlook study also suggests, however, that redundancies are also set to rise substantially, with employers planning to let more staff go than at any time since 2004. A sizeable proportion of these job losses, unsurprisingly, will be sustained by the public sector – a hefty two thirds of public sector organisations intend to shrink their workforces in the first quarter of this year. These staffing cutbacks are reflected in the CIPD’s Net Employment Index, which compares the number of employers planning to raise and lower staffing levels. The index plummeted from last quarter’s rating of +11 to this quarter’s -3.

Contractors from umbrella companies seeking placements in the private sector get better news from the study, however. The Net Employment Index for both the services sector and the manufacturing sector registered a healthy +20. The CIPD’s Public Policy Adviser, Gerwyn Davies, described the first three months of 2011 as “a quarter of reckoning for the jobs market.” He anticipates that the modest recovery seen toward the end of last year will be “reversed by a modest relapse this year.” However, job creation in the private sector remains encouragingly strong, even though the jobs boom everyone is hoping for is “still some way off.”

There was additional encouraging news about the private sector’s state of health, however, from another source. The leading recruitment agency Badenoch & Clark has revealed trends suggesting that a “war for talent” has broken out amongst private sector firms, who are now competing intensely for skilled new staff by offering higher pay packages and salaries.

Recommended Posts

Leave a Comment