The Chartered Institute of Personnel and Development (CIPD) has this week released its latest Work Audit report, “Counting the cost of the jobs recession”, which estimates redundancies made since the start of the recession in 2008 have cost employers a staggering £28.6 billion.
Based on figures from the Office for National Statistics and the CIPD’s own survey data, the report estimates that almost 2.7 million workers (approximately 10% of the working population) have been made redundant since the recession hit four years ago. Manufacturing and construction are highlighted as being two industries in particular which have suffered with these sectors accounting for around a third of all redundancies.
As well costing employers, the CIPD’s report estimates that redundancies have resulted in a cumulative loss to the UK’s economy of between £87bn and £135bn. This equates to between 6% and 8% of gross domestic product.
The effect on individuals who have been made redundant can also be devastating with the report finding that two-thirds of those made redundant will be paid, on average, 28% less in their next job.
Dr John Philpott, Chief Economic Advisor at the CIPD, said: “The cumulative cost of high unemployment and extensive underemployment has been massive and without a more robust economic recovery will continue to rise. This further underlines the need for the Chancellor to set out a convincing strategy for growth and jobs in next week’s budget.”
If you are an employer and require Employment Law advice relating to making employees redundant, so as to ensure you follow the correct procedure nd protect your business against the threat of potential claims, contact Holmes & Hills' Employment Law specialist, David Dixey.
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