Freelancers will no doubt be relieved to learn that Work Wise UK thinks there will not be a large rise in unemployment next year.
Phil Flaxton, the chief executive of Work Wise UK, said the latest data from the ONS bodes well for the immediate future. 70.8% of young people in the 16 to 24 age bracket were employed in quarter 3 and the total number of people in employment actually increased. However, this rise could be because more people are now going self-employed.
Several business leaders have confidence in the private sector’s ability to absorb at least some of the public sector job losses. Flaxton also believes that the UK’s skills shortage will stabilise unemployment levels and might actually cause them to fall.
Despite this, he cautioned against over optimism. A lot of people believe that the low unemployment rates experienced over the past decade were due to the Labour government’s policy of creating masses of new public sector jobs. This is now going to change and it could take several years before the private sector has grown large enough to absorb all of the fallout.
Recruitment finance specialist, Edward Winterton from Bibby Financial Services, agrees that the latest ONS data is cause for optimism. However, he points out that the next six to twelve months will put real pressure on the jobs market.
PwC published a report last month predicting that almost one million jobs could be lost as a result of the government’s austerity measures. This led to the CIPD estimating that the private sector would need to create an additional 1.6 million jobs by 2015-16 in order to stabilise the jobs market.
Winterton also said that recruitment agencies have an integral role to play next year helping private sector businesses. Recruiters will need a healthy cash flow to secure business and seize growth opportunities in the changing market landscape.
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