UK recruiters braced for unemployment rise

Tue, 31 Aug 2010

Recruiters across the country are bracing themselves for unemployment levels to break 10% in more than half of UK regions.

A new report from economic consultants the Centre for Economics and Business Research (cebr) predicts that unemployment will exceed 10% in most of the UK’s regions over the next five years, with the North East, Yorkshire & the Humber, West Midlands, Wales, Northern Ireland and the North West bearing the brunt of anticipated increases. The North West is expected to face the biggest reduction in economic output.

Ian Shaw, director at Manchester-based Actis Recruitment, told Recruiter: “The last couple of years have been quiet for recruitment. Most firms have experienced an upturn in the last six months but nobody knows the effect the public sector cuts will have. That is just starting to kick in.

“We recruit for permanent IT roles. IT firms are keeping costs down and running as close to the bone as possible. Everybody has cut back but when businesses do see a slight upturn, they have to recruit again. It is more a case of replacing staff than expanding. But where they are recruiting, they are recruiting across the board, whether it be support or development. If someone does leave or they get a new project, they have to recruit.”

Paul Clutton, director Professional Recruitment Wales, adds: “I think the unemployment rate will be higher than 10%. The area relies on the public sector with the sector accounting for 60-70% of recruitment.

“With impending spending cuts and redundancy packages and the demise of manufacturing, I think the area will suffer and unemployment will become a significant feature.”

Owen James, economist at cebr, says: “The government’s fiscal austerity measures will not only affect the public sector, it will also have an impact on those sectors supplying the public sector. As such expecting the unemployment rate to differ substantially amongst regions over the next five years should not be shocking.”