Fewer jobs in topsy-turvy economy

Manufacturing News, Source : TheManufacturer.com
Published : 22 Dec 2005 11:59

A topsy-turvy economy in 2006 will yield stronger growth but less job creation as employers seek to reverse this year’s productivity slump, says an authoritative report published today.

According to Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), slower economic growth in 2005, combined with unexpectedly high levels of job creation, are likely to see the year go down in history as the worst year for productivity growth since 1990.

“Employers shied away from job cuts in 2005 as the economy slowed, hoping for better economic news round the corner. This contributed to record levels of employment and the creation of 300,000 extra jobs by the end of the third quarter of the year, despite economic growth remaining below trend. Job seekers who might have been expected to gain from stronger growth in 2006 instead look likely to feel the pinch as employers look to cut costs through slower recruitment, more redundancies, or efforts to raise productivity amongst the existing workforce.

Looking back on 2005, the report reveals that almost one third of organisations made 10 or more people redundant, 85 per cent had recruitment difficulties and three quarters had problems hanging on to people. The average employee was absent for 8.4 working days at a cost of £601.

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