Employment Rates and Pay

Employed Unemployed

England	70.9%	7.7%
South East	75%	5.7%
Source: ONS June 2011

In the year to April, 2011 pay growth (including bonuses) in the private sector stood at 1.6 per cent compared with 2.2 per cent in the public sector. Excluding bonus payments, growth in the private sector stood at 1.8 per cent compared with 2.4 per cent in the public sector. Source: ONS

According to the British Chambers of Commerce UK unemployment will peak at 2.6m in mid 2012. They are also forecasting annual CPI inflation to 4.5% in 2011 and 2.7% in 2012. This forecast suggests that the economy is still facing difficult challenges in the years ahead, and that although growth will be slow, the government is right to persevere with its plans to cut the deficit.

The Berkshire Observatory recently reported that Berkshire has the highest proportion of working age residents in the UK, with Reading having the highest percentage of working age population - which is predicted to rise. 24% of Berkshire workers are employed in the public sector, with 29% in Buckinghamshire. 76% of Berkshire workers are employed in the private sector, with 71% in Buckinghamshire. Berkshire is therefore less reliant on the public sector in terms of jobs - which should be seen as strength of the local economy.

The report also stated that there are more people living in Buckinghamshire who earn £35,000 or more, than those who just work in Buckinghamshire. Berkshire is the opposite. It has less people living in Berkshire earning £35,000 or more than those who just work in the area.

Industry/Sector Trends

The UK recruitment sector has long been seen as a proxy for the general health of the economy - a strengthening economy creates an environment conducive to job creation and in turn promotes the confidence for candidates to change jobs.

As Quarter 1 results come in, it is becoming clear that despite the continuing challenges of the UK economy, recruitment within the private sector is seeing a solid recovery. From December 2010 to February 2011 there were 140,000 more employees than in the previous quarter. However, the Bank of England’s latest forecasts warn that GPD growth in 2011/2012 will be a little below prior forecasts and inflation will continue to remain volatile in 2011, probably rising above 5%. Nevertheless, the implications that there will be no premature increase in interest rates, certainly not until near the end of 2011 will be stabilising news for UK plc. The “double-dip” is far less likely now.

With the axe falling on thousands of public sector jobs nationwide (public sector employment decreased by 24,000 in the first quarter of 2011) the emphasis on councils will be on redeployment, re-skilling and more flexible usage of existing workers rather than any direct recruitment.

There continues to be a shortfall of talent within the following sectors: engineers, chefs/cooks, management/executive, sales representatives, drivers, technicians, skilled trades, teachers, accounting and finance staff and IT staff.

More than half of last year’s university-leavers are unemployed or under-employed six months after graduating. Young unemployment continues to increase month-on-month. The number of graduate jobs is continuing to decrease.

Four business sectors in Berkshire account for nearly 50% of the business community. These are Wholesale/Retail, ICT, Construction, and Head Offices. This highlights Berkshire’s particular specialisms and the clustering of like-minded businesses. In order not to be become overly reliant on a handful of sectors, Berkshire has significant numbers of businesses operating across a diverse range and this will continue to be nurtured and encouraged to grow.

New for this Survey

Rather depressingly, but reflecting the economy, 51% of companies who took part in our Salary Survey have not received a pay rise in the last twelve months and 10% of companies have not received a pay rise in the last two years. To compensate for this, some companies have given an extra day’s holiday. We have included graphs to show information on: percentage of pay increase; how salaries are pitched; how pay rises are made; the categories of staff which have the highest turnover; and exit interviews.

Is Pay the Last Taboo?

It is still considered impolite to talk about what we earn, and yet we are all interested in other people’s pay. The recent Equality Act promotes transparency around pay. Now public bodies with more than 150 employees must publish information about the differences between men’s and women’s pay and rates of employment of those from ethnic minorities or with a disability.

If you think that you need to be earning hundreds of thousands to be in the top 10% of salary earners in the UK, then you are wrong. In fact, you’re in the top 10% (of full time employees) if you are paid over £51,400!

For many of us, what we are really interested in is how much those around us are earning, and this is much harder to find out, especially for workers in the private sector. In the public sector the pay scale is normally readily available, even if you don’t know where people sit in that scale.

Pay secrecy can be damaging according to some experts. Part of the reason why women earn less than men is because they are more likely to accept the pay they are offered without trying to negotiate a higher figure. But if they knew their male colleagues were earning more, they might act differently.

Some workers are bound by secrecy clauses in their contracts, but this is soon to change. The Equality Act will make pay “gagging” clauses unenforceable so that companies will no longer be able to stop employees discussing their salaries with colleagues in order to find out if they are being discriminated against.

Will we be happier or not if we know how much those around us are getting paid - who knows? However, if there is more openness regarding our pay, this is likely to lead to more unhappiness. Being lower down a pay distribution scale invariably hurts people a lot more than it helps to be high up.

Looking Forward

AWR

The notion of temps feeling inferior to their permanent employee counterparts is all set to change with the introduction of the Agency Workers Regulations 2010, which will come into force on 1 October 2011, benefitting the UK’s 1.3 million temporary staff. Under the new plans, agency workers will get the right to equal treatment with permanent employees on pay, holidays and other basic conditions after 12 calendar weeks in a job. They will also get equal access to facilities such as childcare and transport, while working mothers will have time to attend antenatal appointments. The move should make temps feel more valued, but the regulations do not cover benefits in kind, occupational sick pay schemes, maternity, paternity or adoption leave.

Whilst initially employers might be very wary of these changes and see them as a reason not to employ temporary staff, if you are an organisation that employs long term temporary staff, then treating your temporary staff as you would a permanent one can reap rewards for your company. A positive experience of working in an organisation for temporary staff will be reflected in a positive output - a negative one will result in workers not really giving a damn. It is worth keeping temps happy as you may decide to take them on permanently. Treat a temp well and they will be more likely to showcase their talents and deliver better results, making them indispensable. Call centres who employ large numbers of temps on long-term contracts will find that keeping their staff happier will lead to higher sales among staff. You also want to ensure that temps leave your company as an advocate of your brand so that they talk positively about you to their friend and recruitment agencies.

Employing the 50+

According to the ONS over the past decade, an increasing number of older people (those aged 65 and over) are in work. This increase is seen in both full-time and part-time employment.

The Employers Forum on Age (EFA), an independent network of employers who recognise the need to attract and retain valuable employees whatever their age, argues that the time has come for a reconsideration of working life generally, in light of changing demographics and longer life spans. With the end of the default retirement age even more older people will be looking for work and more people will choose not to retire. Employing the 50+ does have huge benefits including reduced staff turnover, recruitment and training costs, greater accuracy and accumulated knowledge and experience.

Jumping ship

The Chartered Institute of Personnel and Development (CIPD) research suggests that more than a third of all workers aim to leave their current employment once the recession has subsided and the job market has been reignited.

The average cost for replacing staff is estimated by the CIPD at £6,125, rising to £9,000 for senior managers. Therefore, organisations should not only pre-empt any threat of an employee exodus by looking after their valued staff now, but also look to their temporary/contract workers as potential full-time employees that can quickly integrate fully into the organisation.

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, temporary and contract, across the following areas:

• Marketing
• Sales
• Account Management
• Customer Services
• PA/Secretarial
• Administration/Reception
• Human Resources
• Finance
• Call Centre Operations
• Project Management
• IT

For full details of the service we offer please contact:

Recruitment in Berkshire
T: 0118 959 2043
E:

Recruitment in Buckinghamshire
T: 01494 510 800
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