Further redundancies and a marked decline in hiring intentions in the public sector, dominate the latest Chartered Institute of Personnel and Development (CIPD)/KPMG quarterly Labour Market Outlook survey.

The survey of over 700 employers and conducted by IPSOS Mori, shows that almost a third of public sector employers expect to cut headcount in the first quarter of 2010, while employers from all sectors plan to cut 6.2% of their workforce in the first quarter of 2010, compared with 3.8% in the previous quarter.  

The survey also shows that the overall net balance between the percentage of employers planning to recruit and planning cuts across all sectors of the economy is still negative (-5%), a fall from -3% in the previous quarter. The public sector recorded a net balance of -31% (down from -13% in the previous quarter), while the private sector’s net balance was +5%, the first time staff numbers have grown since the start of the recession. The public administration and defence (-62%) sector is predicted to be hit particularly hard.

The survey also indicates that outsourcing jobs abroad is a medium-term concern for the UK economy with 10% of private sector companies planning to outsource jobs abroad in 2010. Almost half (44%) of IT companies plan to relocate jobs to other countries, while 17% of  manufacturing companies plan to outsource employment abroad.  More than half plan to outsource UK jobs to India, while more than a third (37%) plan to move jobs to Eastern Europe.

John Philpott, chief economic adviser at the CIPD, says: “The UK jobs market is still on the ropes, with a public sector fall in employment now a reality as it feels the impact of the longest recession in modern times. Despite the jobs market proving resilient in recent months, this represents a mere pause for breath with the number of redundancies easing in the private sector and spending cuts yet to be felt by large swathes of the public sector.

“Unfortunately, there are more testing rounds ahead. Alongside the spectre of deep public spending cuts, the private sector will be dealing with ongoing concerns about productivity, wage costs and inflation.  With many private sector companies looking to move jobs abroad in an attempt to find the right balance between skills, quality and cost reduction, the jobs market needs all the continued support and protection it is getting from the government.”