The chief executive of one of Britain’s largest recruitment organisations has warned that thousands of public sector workers facing redundancy will not be absorbed by the private sector.

Discussing the outlook for employment, Alisdair Cox, Chief Executive of Hays plc, said:

“There is a steady improvement in the jobs market but we’re not seeing masses of new jobs being created; what we are seeing is more people shifting employers. It’s impossible to imagine the private sector is going to have the confidence to create enough jobs to absorb these people; and the private sector is the only place these people can go.”

As part of its austerity measures, the Government is expected to cut 750,000 public sector jobs over the next five years.

Mr Cox called for employers’ national insurance contributions to be abolished as an emergency measure to make it easier for employers to hire staff. He acknowledged the abolition would be a “bold, brave” move that would leave a black hole in the public finances but said that if the Government wanted the private sector to create jobs, it had to make it easier for them and there was a sense of urgency.

The Government had already announced in its emergency Budget in June that there would be a 12-month NI holiday on the first 10 hires for start-up businesses outside the South East.