Page last updated at 09:48 GMT, Monday, 29 December 2008

Dire warning over 2009 job cuts

A job centre
The UK unemployment rate rose to 6% in October

At least 600,000 jobs could go in the UK in 2009, according to a report by a personnel managers' professional body.

The Chartered Institute of Personnel and Development says even those who escape redundancy face pay freezes.

It says that while total unemployment will not hit three million, the time between New Year and Easter will be the worst for job losses since 1991.

According to official statistics, there were 1.86 million people out of work in the UK in October.

That figure was the highest since 1997, taking the overall unemployment rate to 6%.

'Worst year'

David Frost of the British Chambers of Commerce says companies are in 'survival mode'

The CIPD, which represents managers and personnel staff, issued its gloomy forecast a day after children's retailer Adams joined a growing list of well-known chains applying for administration.

Chief economist John Philpott said: "This time last year, in the face of some scepticism, the CIPD warned that 2008 would be the UK's worst year for jobs in a decade.

"It was, but in retrospect it will be seen as merely the slow-motion prelude to what will be the worst year for jobs in almost two decades.

"The CIPD's annual barometer forecast is that the UK economy will shed at least 600,000 jobs in 2009.

This is a time where organisations need to engage in an open and straightforward communication with staff
Charles Cotton
Chartered Institute of Personnel and Development

"Overall, the 18-month period from the start of the recession in mid-2008 until the end of 2009 will witness the loss of around three quarters of a million jobs, equivalent to the total net rise in employment in the preceding three years."

Mr Philpott said job losses were likely to continue into 2010, taking the final toll to about one million.

The CIPD also surveyed 2,600 workers and found that more than one in four did not expect a pay rise next year, while others feared a wage cut.

The institute's reward adviser, Charles Cotton, said employees were "realistic about their pay prospects".

"Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform," he said.

Financial incentives and targeted investment in training and development could be effective ways to do this, he added.

"More than ever, this is a time where organisations need to engage in an open and straightforward communication with staff, clearly explaining the reasons for any difficult measures that will affect them," he said.

"This will help preserve staff loyalty and engagement even during times when unpopular decisions need to be made."

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