Next year could be the worst for jobs in two decades, starting with a dramatic surge in redundancies in the first quarter, according to the latest in a series of gloomy predictions about 2009.
Next year could be the worst for jobs in two decades, starting with a dramatic surge in redundancies in the first quarter, according to the latest in a series of gloomy predictions about 2009.
The Chartered Institute of Personnel and Development (CIPD) warned that 600,000 workers were facing redundancy over the next year, with thousands of others having their pay frozen.
Predicting that more than a million jobs will have been lost in the UK by the time the recession ends, the CIPD cautioned that the period between New Year and Easter would be the worst for redundancies since 1991.
Chief economist John Philpott 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 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," said Philpott.
"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 one million.
Based on survey evidence and employer soundings, the CIPD expects that the number of redundancies will jump sharply in the early months of 2009, once employers take stock of the economic outlook.
Research by the institute suggests more than a quarter of UK workers are braced for a pay freeze in 2009.
However, Charles Cotton, a pay specialist at CIPD, said: "Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform."
He said firms could use non-financial rewards, such as investment in training and development, to make limited budgets go further and help them emerge ready to capitalise fully on the recovery.
The report was published as economists at HSBC predicted the global economy would contract in 2009 for the first time since the Second World War.
Lesley Sawers, chief executive of the Scottish Council for Development and Industry, said that 2009 would be an "incredibly difficult year" for Scotland and the Scottish economy.
Sawers called on ministers to act quickly to support the economy in whatever ways they could.
"By investing in transport, in housing, and in strengthening our business base we will ensure that the downturn is as short as possible, whilst preparing for the upturn that will inevitably come," she said.
Claiming there could not be a worse time to introduce a change like the local income tax, she said the Scottish Government should drop the proposal.
