Labour on attack over faltering job hopes

Government attempts to spark a "feelgood factor" about employment prospects is challenged today by Labour Party analysis of official figures and the findings of a leading employment agency.

Reed Personnel Services records the first drop in demand for permanent staff for two years and Labour points to a higher redundancy rate among men.

While the Reed Employment Index shows a record high in job offers to temporary staff - 63 per cent above the peak of the 1980s economic boom - demand for permanent staff is reported to be 40 per cent lower.

Reed concedes that there is an underlying growth in permanent posts since 1992, but the number of jobs for temporary staff has risen at a much higher rate.

And figures published in the latest edition of the Employment Gazette show that 143,000 men were made redundant in Great Britain in spring 1996 compared with 137,000 in the same period of 1995.

The job prospects for both men and women who lost their jobs also deteriorated. The number finding jobs after redundancy fell from 87,000 to 74,000.

Ian McCartney, Labour's chief employment spokesman, said the official statistics showed that ministers' claims about falling unemployment could not be trusted.

Mr McCartney calculated that there were almost one million fewer jobs in Britain since John Major became Prime Minister. Men were becoming "economic cast-offs" with skilled full-time jobs disappearing and being replaced with insecure and temporary work.

James Reed, chief operating officer for Reed Personnel Services, conceded that the current downturn in demand for permanent staff may be a "blip" in the figures. "However the underlying contrast between demand for temporary and permanent staff remains a startling indication of the extent of the change in the structure of the workforce during the 1990s," he said.

Mr Reed believes that such a pattern might be about to change."Employers are being confronted with an increasingly severe skills gap when searching for the high-quality temporary staff they require. They are also becoming more able to plan for the medium-term and have realised the need to retain and grow a larger core of skilled, permanent staff within their organisations. It may be that staff demand will revert to its previous pattern, with demand for permanent staff beginning to grow at a faster rate as the UK approaches the millennium."

A report published today by the Institute for Employment Studies supports Mr Reed's assertions. It predicts that organisations are likely to become more cautious about contracting out parts of their business. The study believes that experience has shown companies that in order to protect their reputation and brand image they must maintain "core skills".

The institute believes employers have learned that they should not "out- source" problems. They need to know that the contractor can do a better job and that they can manage an activity once it has been "outsourced".

t There is widespread concern over the validity of personality questionnaires in recruitment, according to the research group Industrial Relations Services. The number of organisations using tests of all kinds has risen by nearly 50 per cent in the last five years, but almost all of the increase is accounted for by "job-specific" tests. The number using personality questionnaires had remained steady.