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"Fewer job cuts to come", reveals new comparative US/UK labour market data

The proportion of US employers making cuts to their workforces has more than halved in the second quarter of 2009 compared to the first quarter, with the UK predicted to follow suit. This is the most striking finding of a comparison between Labour Market Outlook surveys from the UK’s Chartered Institute of Personnel and Developmen and the US’s Society for Human Resource Management, published earlier this week as the latest US jobless figures are announced.

With conditions in the US jobs market foreshadowing what subsequently happens in the UK this may provide some comfort to UK workers fearful for their jobs. However, the comparison offers no sign of employment ‘green shoots’ in either the US or UK. Although the scale of job shedding will from now on be much slower than earlier in the recession, job losses will not abate for months to come and unemployment will continue to rise.

The SHRM survey suggests considerably fewer second quarter US job cuts – with fewer than 1 in 5 employers planning to cut jobs (17%) compared to 4 in 10 in the first quarter (39%). According to the CIPD survey, the number of UK employers planning to cut jobs in the second quarter of 2009 is almost identical to that of the first quarter in the US (40%). Assuming that the pattern previously observed in the recession holds – i.e. with UK employers behaving in a similar manner to their US counterparts but with a lag of approximately one calendar quarter – the scale of UK job shedding should ease considerably in the second half of the year.

Gerwyn Davies, CIPD Public Policy Adviser comments:

“What’s now happening in the US jobs market offers hope that the rate of job losses in the UK will slow noticeably during the second half of this year. But we shouldn’t get carried away by talk of economic ‘green shoots’, especially when it comes to employment prospects. The jobs market may be contracting at a slower pace but it is continuing to contract all the same, with unemployment of more than 3 million on the way as we head toward 2010.”

The Labour Market Outlook and the SHRM report are available to download from the following websites:

www.cipd.co.uk/labourmarket

www.shrm.org/Research/FutureWorkplaceTrends/Pages/default.aspx

11th June 2009