The jobs market will “stall” in the new year, raising the prospect of increasing numbers of people looking abroad for work, according to a new report.
Online firm Totaljobs.com said recruitment activity was forecast to be scaled back, following a period of growth in 2010.
Competition for jobs has also increased this year, with 19 people applying for every vacancy in November, a record high, the study found.
John Salt, director of Totaljobs.com, said: “2010 has been a story of a long hard climb to reach the peaks of job supply we last saw back in summer 2009.
“Unfortunately the new year looks certain to see us sliding backwards, with external influences such as the VAT increase and instability in the European markets set to hit both employer and consumer confidence.
“We expect a contraction in job supply at the beginning of the year as businesses wait to see how the UK economy performs. However, although the labour market is likely to be uncertain in the first quarter in 2011, we see it recovering later in the year, with key service and support sectors such as sales and administration and PA roles leading the upturn.”
Areas of the country where public sector employment is high, such as the North East, Northern Ireland and Scotland, will struggle on the jobs front in 2011, leading to an increase in the number of people out of work for several months, the report warned.
Mr Salt added: “With an unsure start to 2011, there is the real possibility of a talent exodus as more people look abroad for jobs. As companies continue their European-wide recruitment drive, the issue of key skills leaving the UK is real.
“We also expect there to be further pressure for private sector jobs early in the year as the nation looks to them to pick up the slack from the public sector cuts this year.”