We are likely to witness a new North/South divide, courtesy of the government’s Comprehensive Spending Review, according to thinktanks and unions.

Umbrella company contractors may need to carefully consider which side they are on.

Although the government believes that the private sector will be able to create jobs for the 490,000 public sector workers who are going to be made redundant, towns such as Blackpool and Liverpool, which have weak private sectors, are going to feel a disproportionate impact.

The senior economist at the Work Foundation, Neil Lee, said that it was important to realise that the public sector is not only an employer. It also supplies local services and provides opportunities for local businesses. The cuts in public spending will have a knock-on effect on private sector employment, and areas with weaker economies will be hit worst.

Ed Cox, a director of the Institute of Public Policy Research North, agreed saying that the speed and severity of the cuts are a major threat to the recovery of the North of England. The area was the hardest hit by the financial crisis and is still struggling to recover. A lot of jobs in the North are reliant on the public sector and these drastic cuts could cause a sudden increase in unemployment and a large rise in the benefits bill.

The Institute thinks George Osborne should have arranged to reduce the budget deficit over a period of 6 years, instead of the planned 4. If there was also scope for adjustment, the North would stand a better chance of a private sector recovery, which could in turn absorb some of the public sector job losses.

The general secretary of the TUC, Brendan Barber, agreed that job losses in the public sector are going to occur in some depressed areas of the UK where there is already poor private sector recruitment.

Let’s hope that things turn out better than people are currently predicting!

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Mind/the/gap by futureshape

Professionals and employers are showing signs of increased confidence as the unemployment rate falls, according to Hays Recruitment.

The latest data from the ONS, published on Wednesday, showed an increase in the employment rate for the three month period to August. The number of people out of work fell by 20,000 to 2.45 million. However, in September, the number of people claiming Jobseeker’s allowance rose by 5,300 to 1.47 million; the second consecutive monthly increase.

A spokesperson from Hays said that the job market in the UK is starting to show signs of recovery and employer confidence is rising. However, we have still got a long way to go before we experience a full recovery.

The IT, digital marketing and energy sectors are showing resilience and recruitment in the City is increasing as financial companies continue rebuilding their businesses.

Pharmaceuticals continue to do well, particularly in such areas as health economics, regulatory affairs and statistical programming, due to increased safety measures.

The legal and health, social care and social housing sectors are also recruiting as healthcare professionals enjoy more job security due to skills shortages.

Commenting on the figures, the MD of Adecco, Steven Kirkpatrick, said that employers were still showing signs of caution when it came to recruiting permanent staff, but its branches were reporting a steady increase in the demand for temporary, part-time and permanent employees.

On the downside, the outlook for temps may not be so promising in the long run. A recent survey from Adecco found that nearly 33% of HR professionals will reduce their use of temporary workers as a direct result of the AWR due to come into force next October.

There are currently more than 1.5 million temps working in the UK and it is vital that HR professionals understand the true value the flexible workforce brings to the economy.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Past | Present | Future by d.billy

The chief economist at the Bank of Scotland has predicted that the Scottish economic recovery is going to slow down in Q3.

The Scottish economy has been on a bumpy road since emerging from the recession at the end of last year. Although the private sector has been growing for the past 13 months, economic growth actually stalled in the first quarter of this year.

Scottish manufacturers’ sentiment dropped 20 points to zero between quarters one and two according to the CBI index and the Consumer Confidence Index, compiled by Gfk NOP, registered -22 last month.

Those looking for new employment will be heartened by the news that the Bank of Scotland’s Report on Jobs showed an increased demand for permanent workers for the 8th consecutive month.

Growth in the leisure, tourism and travel sectors continues to outstrip growth in business and financial services. And the manufacturing industry is receiving more orders and they are rising faster than inventories, so manufacturers will need to increase the supply of finished goods if they are to keep up with demand.

However, it is thought that the recovery will slow down in the autumn months as widespread concerns continue over government spending cuts.

However, good news for the Scottish jobs market comes with the news that Hewlett Packard is to create 700 new IT jobs at its plant in Erskine, something which could benefit umbrella company IT contractors. The technology giant is setting up a service hub in Renfrewshire, partially aided by a government grant of £7 million.

Alex Salmond, the First Minister, is delighted at the news saying it is testament to the skilled workforce in Scotland that HP has decided to invest in the region and it also points to conditions improving in the IT sector.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Good news/bad news by madmolecule

On Wednesday, the ONS revealed that unemployment in the UK had fallen for the second consecutive month, but candidates and employers still remain cautious.

In the quarter to June, the number of people unemployed fell to 2.46 million, a drop of 49,000.

However, focus is currently on the job cuts that will affect the public sector and there is continuing concern that the private sector will not be able to provide enough jobs to counteract the redundancies.

Candidates with the specialist skills that were in demand throughout the recession are still required with areas such as IT, pharmaceuticals and senior finance still providing candidates with significant opportunities.

Recruitment in the City is picking up as the banks rebuild and there is increasing demand for both permanent and interim candidates with previous experience in the financial markets.

Kevin Green, from the REC, commented that the latest ONS employment figures mirror reports from recruitment professionals who have been reporting an increase in appointments in the past few months, although the growth rate has begun to ease. He expects the rate of growth to continue decelerating as the public sector cuts start to bite.

The REC does not expect to see unemployment rise significantly, rather the jobs market will remain flat as the private sector absorbs the public sector fallout. Achieving this will be crucial to the country’s continued recovery and the government can help by reducing business taxation and red tape. Green added that the public sector should avoid making knee-jerk cuts in agency staff and support measures to help young jobseekers should be enhanced.

According to the REC’s July Jobs Barometer, nearly a third of employers are expecting to increase the amount of temporary workers they use over the coming 12 months and 29% plan to hire more permanent workers.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Caution to the Wind by CarbonNYC

SMEs and umbrella companies have been struggling to get much needed finance from the banks and Vince Cable has now put forward the government’s proposals to force the banks to make more funds available for small companies, including limited company contractors.

At the weekend, Mr. Cable had said that the government is very concerned that the banks are not acting in the interests of the nation. “I don’t think they get it” the business secretary was quoted as saying.

Amongst other measures, the business secretary is considering implementing a new tax on the profits of those banks which refuse to support viable businesses. Cable also points out that £50bn of new finance could be released if banks slashed payouts to their staff and shareholders.

Another of the measures designed to help small businesses is the extension of the Enterprise Finance Guarantee scheme beyond the original expiry date of March 2011. The EFG was introduced by the Labour government but lending under the scheme dropped by 23% in the half year to March, compared with the previous six months. In June, the government increased the amount available through EFG to £700m, a rise of £200m.

Also under consideration are regional stock exchanges and new ways to encourage venture capitalists to invest in a broader range of businesses.

Vince Cable’s proposals were laid out on Monday in a Green Paper entitled ‘Financing a private sector recovery’ in which it was acknowledged that SMEs are vital to the UK economy and could contribute significantly to the UK’s economic growth.

The Green Paper was welcomed by employers’ organisations who believe the government should be adopting a tougher approach with business bank accounts. Accounting professionals, on the other hand, were a bit more cautious saying that the economic environment encourages banks to lend, not Green Papers.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Point! by a2gemma

The managing economist at the CEBR, Charles Davis, has cautioned umbrella company contractors that whilst the economy in the UK is recovering, the recovery is not yet robust.

We are still in the early stages of improvement and everybody must be aware that the government’s tight fiscal policy controls are coming into play almost immediately, he said.

The Monetary Policy committee meets this week to decide if the Bank of England interest rate is to be maintained at its historic low rate of 0.5%. Davis believes that interest rates will remain at this unprecedented low for the immediate future.

Recruitment demand for new employees remained unchanged in June, as did salaries, according to the Reed Job Index published on Monday. The Index is based on the reed.co.uk job board which is the largest in the UK. Every day more than 90,000 vacancies are advertised on the job board from 8,000 recruiters covering 37 career sectors.

Job demand is highest in the media, digital and creative sectors and vacancies for sales and qualified accountancy staff reached record highs last month. The financial and business sectors have also shown increased demand.

On the other hand, vacancies in the strategy and consultancy, marketing and PR and voluntary sectors, fell back from the highs seen in May. And as expected demand in the public sector fell after the job freezes announced in the budget. Yorkshire and Humberside and the East Midlands recorded an increase in demand whilst London and the South East saw demand drop.

Reed.co.uk’s MD, Martin Warnes, said that although green shoots of recovery are now visible, the jobs market appears to have held its breath last month.

The Markit/CIPS Business Activity Index showed that the service sector experienced its slowest growth rate for nearly a year last month. A senior economist at Markit said that the latest results were worrying and although we are hoping to see a slight rise in GDP for the second quarter, this may already be a peak in the recovery cycle.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Imagine a world without trees by aloshbennett

Welcome news for temporary workers and freelancers comes in the form of the REC’s JobsOutlook report for June and the ONS.

According to the REC, a third of all employers plan to increase their use of temporary workers in the long term. Increased usage of contractors has already been noted by the ONS who said that an additional 50,000 people were taken on temporary contracts in the first quarter of this year compared to 2009.

Employers have increased their demands for short-term agency workers as uncertainty still remains over the UK’s long-term economic prospects. Utilising flexible resourcing, such as the usage of umbrella company workers, is likely to continue for the immediate future as most employers think they will wait until at least the autumn before making decisions about permanent hiring.

Roger Tweedy from the REC said that they are starting to see positive signs of employment growth and puts this down to the feeling that the new coalition government is good for job creation.

Recruiters will welcome the news that up to 6 million employees plan to look for new opportunities now that the recession has ended.

However, there is still uncertainty surrounding the public sector and this will to some extent offset the private sector growth. Whilst some permanent jobs in the public sector are likely to be axed, demand for contractors and interim management specialists is likely to increase to cope with change management programmes.

23,000 additional people became unemployed in the quarter ending April according to the latest figures from the ONS. The current figure stands at 2.47 million although only 1.48 million of these are claiming jobseekers allowance.

Of concern is the fact that 926,000 young people aged between 16 and 24 who have neither work nor attend a training course. The REC is calling on the government to do more to help youngsters get a foot on the jobs ladder and it intends to make specific recommendations to the coalition in the coming few weeks.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: perspective by paul (dex)

Employers and recruiters are becoming more optimistic and their confidence levels have reached their highest level this year, which could benefit those working through PAYE umbrella companies.

Only 4% are taking the pessimistic view that they will need to cut their workforce over the next few months. Last month 6% of employers were less than optimistic about their workforce’s future.

Good news for contractors also as 86% intend to increase or at least maintain their use of temporary freelance workers.

However, on the down side, the latest unemployment figures again showed an increase in the number of people without a job. There are now 2.51 people unemployed.

Recruitment agencies are reporting that most sectors are showing an increase in hiring activity. International recruitment started to increase towards the end of 2009 and that trend now also includes the UK permanent jobs market.

The REC says that the job market is now growing at its fastest rate for more than 12 years. However, public sector job losses have yet to take affect and when that happens the current upward trend could cease.

The problem faced by our new government is how they can cut the deficit whilst still stimulating growth.

Although we are nowhere near a normal economy, several sectors including telecoms and waste management are already making plans for future growth.

In Europe, countries such as Belgium and France, are expecting to see recruitment grow by up to 15% this year.

One country that has not suffered from large rises in unemployment is Holland. They have an unemployment rate of just over 5% and this has been largely attributed to an extensive use of flexible staffing arrangements.

Portugal, on the other hand, was badly hit by the recession. Construction, manufacturing and the motor industry suffered the most but since the turn of the year things have started to improve.

The outlook is also looking promising for the global recruitment industry. The World Employment conference has been taking place in Sao Paulo and feedback was upbeat.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: The perfect time to smile by ilovestrawberries (Carmi)