Employment Rates and Pay
According to the Labour Force Survey (LFS) the jobless rate has increased to 7.1% in the three months to March 2009, and of the 244,000 increase in unemployment during the first three months, 115,000 came in March alone. There are 2.2m people now unemployed in Britain.
The young are bearing the brunt of the increase in joblessness – of the 115,000 added to the LFS unemployment measure in March, 56,000 were under 25. One in six 18-24 year olds are now looking for work.
According to the chief economist at the Chartered Institute of Personnel and Development youth employment prospects, already poor, will deteriorate further when those already without work are joined by the “class of 2009” school-leavers and college graduates.
The weaker demand for labour is also having an impact on job vacancies, which are down 51,000 in the first quarter of 2009 and 232,000 over the past year to 455,000. Average earnings across the economy were 0.4% lower in the three months to March, 2009, than they were a year earlier, reflecting wage freezes and the reduction of City bonuses.
Private sector workers are being squeezed harder that those in the public sector according to the ONS, with average earnings, including bonuses, for private sector workers falling 1.2% in the year to March 2009. The drop, which equates to an average annual loss of salary of £350, was largely due to a fall in the value of bonuses. The public sector has been left relatively untouched, with earnings up 3.6% on a year ago.
Those working in services such as accounting and banking have fared even worse – they are paid an average 1.9% less than a year ago.
Source: (The Labour Force Survey (LFS) is a quarterly sample survey of households living at private addresses in Great Britain. The survey is carried out by the Social and Vital Statistics Division of the Office for National Statistics (ONS) on behalf of the Statistical Outputs Group of the ONS.)
Industry/Sector Trends
According to our Salary Survey there has been a plateau in salary increases because of deflation. Whereas 80% of clients surveyed view salary increases being a mix of inflation and performance related, we are seeing a move towards performance related pay. However, taking into account the current economic climate, performance related pay may go down to nothing.
Certain industry sectors – IT, pharmaceutical and marketing – appear to be holding their own and still working to their same performance measurements as they always have. Sales staff and sales skills are in greater demand than ever, as firms look to gain a competitive advantage.
Is redundancy the only option?
In the current economic climate, most businesses and organisations are seeking to cut costs. In many organisations staff is the greatest asset and the largest cost. Therefore the workforce is often the first place management looks to make cost savings. Many employers assume that the way to solve a financial crisis is to make employees redundant – but there are alternatives.
Firstly it is important to identify the key objective – it may be to reduce headcount, but it might also be to cut costs (they are different); re-focus the business; clear dead wood; ensure a better functioning department or ensure that achievement and reward are more closely aligned. From the outset an employer should consider the key objective to ensure that it properly addresses the problem and follows the correct legal procedure.
An employer should carry out a thorough cost-benefit analysis for every option and balance factors such as cost, time to effect, legal risk, stress and morale, management time and resources.
During our recent seminar on redundancy and how to minimise risk, practical tips were given which included reducing staff hours; introducing pay cuts; asking staff to work for free to ensure that in the future they have a job; and asking staff to work for commission only.
Looking forward
As recruiters we have seen the trend of skills shortages in 2007/2008 moving to an abundance of exceptionally talented and skilful available candidates. The general economic view is that we have reached the bottom and the only way is up from here. When it comes, which it will do, the talent and choice available for recruiters will be immense.
Dare we mention our Chancellor’s statement of green shoots appearing this autumn? Whatever your political persuasion, we as recruiters are a good barometer of what is happening in the economy, and we are certainly seeing that our SME clients are starting to recruit once again particularly in some of the market towns we support – Thame, High Wycombe and Wokingham.
Currently, our corporate business partners tend to be handcuffed by the hiring freezes imposed on them by their international HQs.
Many of our staff have experienced working through the last recession and know that the upturn can be swift and therefore, it will be imperative to tap into those skilled and talented candidates currently registered with us.
Delaney Browne can help with all your recruiting challenges. We believe that our professional, empathic and caring attitude, together with vast experience, places us at the heart of matching people with people.
Our expertise ranges from management through to support levels, permanent and temporary across the following areas:
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| Visit www.delaneybrowne.co.uk for full details of the service we offer, or contact: |
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| Berkshire Recruitment |
t: 0118 959 2043 | e: all@delaneybrowne.co.uk |
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| Buckinghamshire Recruitment |
t: 01494 510 800 | e: recruit@delaneybrowne.co.uk |