CIPD Assessment Has Graduates, Businesses, And Government Cautious About Market Overconfidence

Recent reports by a variety of government and non-governmental agencies alike have given hope to graduates and businesses alike about the job market, wages, and the overall cost of living. However, a study by the Chartered Institute of Personnel and Development (CIPD), an organiation devoted to studying the British job market, is pleading a more sober assessment of the job market as not to lead to overconfidence.

The CIPD assessment comes on the heels of reports by the British government that unemployment decreased in the final quarter of 2006. Claimants of unemployment benefits, as well as more generic measurements of unemployment, decreased from October through December. As well, the government has observed a minor increase in employment figures over the last quarter of 2006, giving hope that the economy will equalize without much government intervention.

However, CIPD analysts urge caution against overconfidence that improved employment numbers will mean higher wages and a better bottom line for businesses. The main reason the institute is concerned about these numbers is that they do not reflect the dynamic nature of the British economy. After all, there was an increase of 49,000 people over 2005 numbers who decided to pursue self employment. As well, an increase of 22,000 people paid by government pensions over 2005 numbers means that there are fewer people seeking employment or unemployment benefits.

CIPD is also concerned because the main indicators of the job market are not demonstrating a robust market for graduates and businesses. In the final quarter of 2006, there was a decrease of 105,000 full time employees from the British market which is not an inconsiderable amount when thinking about the job market. As well, nearly 26,000 professionals sought temporary work as opposed to full time employment in an effort to gain experience down the road. These numbers indicate that the need for full time employees is decreasing, since companies are hiring more temporary workers in recent months.

In the end, CIPD is hoping alleviate any pressure created by overconfidence on graduates and businesses alike. The institute’s efforts are to paint a realistic wage picture for workers so they can create an individual career path that meets the realities of the workplace. As well, CIPD hopes to create a better vision of the intersection of wages and business expenses in order to make the job of accountants and executives a whole lot easier.