It seems that there is a stark disparity between public and private sector employers in terms of their employment and redundancy intentions.
The latest quarterly analysis from KPMG and the Chartered Institute of Personnel and Development measures the difference between the proportion of employers that intend to increase staffing levels and those that intend to decrease them. While the net employment intentions balance for the private sector stands at +19, the balance for the public sector comes in at -35.
What does that mean? The majority of employers that are currently planning to reduce their workforce are public sector organisations, with areas like defence, public administration and local government planning the biggest cuts.
Managers in the public sector have now woken up to the scale of the financial crisis that they face, and many are now contemplating redundancy programmes. Surprisingly, some are still intending to recruit, albeit at a reduced pace.
In the months ahead we will see a substantial reduction in public sector headcount as the cuts begin to bite. That is the painful but inevitable consequence of the coalition government's determination to tackle the UK's massive structural deficit.
The big question is whether the private sector can create new jobs in sufficient numbers and quickly enough to offset the downturn in the public sector. Are we about to return to strong and sustained economic growth, or will we experience a faltering recovery in which unemployment will rise steadily because of the retrenchment in the public sector? The survey suggests it is too close to call.
Alan Downey is UK head of public sector at KPMG
