The Labour Market Outlook from the last quarter of 2010, published by the Chartered Institute of Personnel and Development and KPMG, highlights the challenge facing public service managers, The Outlook shows that redundancies will rise sharply in the first quarter of 2011.

The Labour Market Outlook net employment index, which measures the difference between the proportion of employers across all sectors that intend to increase total staffing levels and those that intend to decrease total staffing levels in the first quarter of 2011, has fallen from + 11 to -3. Two thirds of public sector organisations will be looking to reduce the size of their workforces in the first quarter of 2011.

Redundancy intentions have risen to their highest level since the survey began across the whole economy and are highest in the public sector where more than half of public sector employers intend to make redundancies in the first three months of 2011. More than three-quarters of local government employers plan to make cuts to their workforces.

The report’s twelve-month index, which gives a longer-term perspective on recruitment and redundancy intentions, has also fallen from + 1 to -9. One in three of employers say they will be looking to employ fewer people in 2011 as a result of the Comprehensive Spending Review.

Gerwyn Davies, Public Policy Adviser at the CIPD, said: “The first quarter of 2011 was always going to be a quarter of reckoning for the jobs market, and it seems that last year’s modest recovery will be reversed by a modest relapse this year. Encouragingly, the private sector continues to generate new jobs, but we are some way off the jobs boom that we are all hoping for.”

The figures emphasize warnings that there is an urgent need for the HR community and line managers in the public sector to step up and help employees cope with the changes ahead, and support them in finding new roles. The evidence to date suggests that they may be under-resourced to handle redundancies. The challenge is to support staff both emotionally and practically during this period of transition. As well as identifying ways to redeploy staff, they may need to offer opportunities to retrain and provide advice and counselling.