08.09.15
Public sector to see job cuts in Q4 as employment confidence slumps
Public sector employers are predicting the need to cut posts rather than take on workers as a result of weakened nationwide confidence around the upcoming Spending Review, a Manpower employment survey has shown.
It revealed that the public sector employment outlook has slipped to -1% for the first time since the end of 2014.
The survey for the fourth quarter of 2015 asked a representative sample of 2,101 UK employers whether they intended to hire workers or reduce their workforce until the end of the year.
Results for both the public and private sector proved the weakest reported since the end of 2012, with net hiring prospects slumping to 4% – a total of 2% lower than the previous quarter and a decline by 3% year-over-year.
Confidence in public sector staffing in the north east has been hit the hardest nationwide, sloping to -2% as one-fifth of workers in the region are publicly employed – the highest proportion in England.
This is the first time the north east’s outlook has slipped into negative territory since 2013.
Amanda White, operations manager at Manpower, said: “Part of this drop in hiring intentions is being driven by the public sector, where confidence has slipped nationwide following the government’s renewed commitment to cuts.
“We are also seeing a marked divide between job prospects across the north and those in London – a clear sign that the government’s plans to rebalance the economy through the creation of a Northern Powerhouse have so far failed to ignite.”
But she added that despite overall “public sector pessimism”, there is strong demand for engineering and manufacturing workers and for applicants to fill contact centre, warehousing and distribution roles.
Manpower’s data also suggests that employers are already feeling the impact of the national living wage which is “sending shockwaves” through the entire labour market.
James Hick, Manpower Group Solutions’ managing director, said: “An unintended consequence of the introduction of the new living wage is that firms might try to bypass the legislation altogether. We anticipate that some employers may look to mitigate the extra costs by taking on more younger or self-employed workers, who are not entitled to the national living wage.
“While on the surface this could be good news for youth employment, which currently stands at 16%, it could push a greater proportion of young people into low-skilled jobs, resulting in an influx of less experienced workers into social care and other sectors hardest hit by the new legislation.”
Job prospects have slumped in most regions, with the south west seeing an employment outlook of 2% compared to 9% in this year’s third quarter.
In Scotland, employment outlook is frozen at 0% – the third quarter in a row that their outlook has not risen into positive territory.
However London’s employment optimism is well above the national average, standing at 8% – despite recording “lacklustre” performances in finance and business services, its largest industry.
The capital’s performance provides a stark contrast to other UK regions, with the north west and West Midlands in a 0% standstill and Yorkshire and Humberside lagging behind the national average at 3%.