Where does the Sun’s 28% come from?

March 14, 2012

Two different takes on the same report – “Redundancies since start of jobs recession cost UK employers £28.6 billion“, claims the Chartered Institute of Personnel and Development (CIPD).

But the Sun approaches this report from a different perspective –   “Counting the cost: 2.7m made redundant since ’08“. Nothing at all untoward here, of course – the Sun is rightly putting the focus on the human, rather than the business, cost.

One line from the report caught my eye; namely, that “two-thirds of people made redundant are paid less in the next job they find. On average the pay penalty is 28%” (or, as the Sun phrases it, a “humiliating” 28%).

This is one instance where I would like to know which “average” is being talked about. The most natural average in these circumstances is either the mode (the value or range which appears most frequently) or median (the middle value). The Sun, unsurprisingly, doesn’t specify which, but I’d have hoped the CIPD would.

A look through the full report, though, reveals that this bit of information actually comes from a different survey: “The annual CIPD/YouGov employee reward surveys, conducted since 2008, consistently find that two-thirds of people who are made redundant and who then return to work are paid less in their new job. On average, the pay penalty is 28%.”

The CIPD/YouGov report for 2011 is here [registration required – by the way, don’t you hate websites which make you pick a unique username in order to register, but fail to tell you what usernames are available? I simply adore trying to second-guess what variants of my name other users of the site have already snaffled so I can find one that’s free! – oh, and when you’ve finally registered, the site helpfully dumps you at the homepage rather than returning you to the page you were trying to access.]

It says that for 62% of those employees whose first job it was since being made redundant in the last 12 months, “redundancy has led to them earning less now than they previously did” (there is a caveat about the low base size of n=67, while in the report for 2010, n is given as 42 for 2010 and 46 for 2009).

Crucially, however, the size of the pay penalty (that figure of 28%, remember?) isn’t given.

It is in the 2010 report that we finally come across this sentence, referring to employees made redundant in the past year who earn less compared to what they used to earn: “On (median) average these people are earning 20% less than what they did previously.”

So one mystery is solved (the average used is the median), only to throw up another – where did the figure of 28% in the 2011 report come from?

Any answers would be gratefully received!

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