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Private sector firms set to take up employment slack

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Private sector firms will begin a recruitment drive during the summer that should calm worries that the recovery will create fewer than hoped for jobs.

According to the Chartered Institute of Personnel and Development’s latest quarterly labour market survey, the economic recovery should lead to an employment boost.

The uplift in job prospects, however, will come almost exclusively from the private sector.

The CIPD report indicated that while private sector employers are more optimistic about creating jobs in the second quarter of 2010, public sector employers are a lot more pessimistic about employment intentions compared with three months ago.

The overall net balance between the percentage of employers expecting to recruit and those expecting to cut staff across all sectors of the economy moved into positive territory (+5 per cent) for the first time since the winter of 2008.

Although the new figures represent an overall increase from the -5 per cent recorded in the previous quarter, the survey showed that the improvement is almost wholly accounted for by a significant rebound in the private sector, which recorded a huge +29 per cent upward movement from just +5 per cent.

The rate of growth was universal in its coverage and included sectors that had been badly hit by the recession, such as manufacturing.

By contrast, the net balance for the public sector was -43 per cent, the largest negative balance since the survey began in 2004.

Worries about a two-speed geographical recovery also emerged from the survey.

While employment growth in the south of England looks well set (+21 per cent), the news from the north of England, Scotland and Wales is less hopeful, with employment predicted to continue in its decline.

The upturn in the economy is having other effects on the jobs market, the CIPD said.

The proportion of employers expecting to recruit migrant labour has more than doubled over the previous three months. Fifteen per cent of employers are now planning to recruit migrant workers, up from 7 per cent.

Around four fifths of new recruits will be full-time workers, possibly suggesting a return to more full-time employment following the surge in part-time employment during the recession.

Youth unemployment could remain a persistent problem. Just 14 per cent of employers plan to hire 16-17-year-old school-leavers, a third (32 per cent) intend to recruit school-leavers aged 18 and above and about a half (47 per cent) are looking to take on graduates in the three months to July.

Almost one in four employers (24 per cent) intend to create apprenticeship places in the six months to September, while 21 per cent want to offer internships.

Gerwyn Davies, the CIPD’s public policy adviser, said: “The recession represents a long, dark winter for the jobs market. However, a return to spring could mean a growth of full-time jobs in the private sector that may continue if the global economy continues to recover at the same rate. It also raises hopes that we may be close to a peak in unemployment.

“In contrast, public sector employers will be looking to close the lid on employment, pay and promotion. This will present challenges to the employment participation rate of women and the economic development of some UK regions, which have both been boosted by record increases in public spending in the past decade.”