2009 'worst for jobs in 20 years'

The Chartered Institute of Personnel and Development (CIPD) warned that when the recession ends, more than a million jobs could have been lost in the UK.

The institute, which represents managers and personnel staff, forecast that unemployment will stop short of three million, but it warned that the period between New Year and Easter will be the worst for redundancies since 1991.

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. 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.

"Assuming the economy bottoms out in the second half of 2009, job losses are likely to continue into 2010, in all probability taking the final toll of lost jobs to around one million.

A survey of 2,600 workers by the CIPD showed that more than one in four did not expect a pay rise next year, a similar number believed any wage increase will be lower than in 2008, while some feared a wage cut.

CIPD reward adviser, Charles Cotton, said: "With job cuts lurking around every corner and trading conditions tight, employees are realistic about their pay prospects for the year ahead. Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform.

"More than ever, this is a time where organisations need to engage in an open and straightforward communication with staff. This will help preserve staff loyalty and engagement even during times when unpopular decisions need to be made."

The report warned that many workplaces will feel like TV dramas ER or Casualty next year, with managers facing traumatised or anxious workers affected by job and pay cuts.