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Private Sector experience of recession could help public sector navigate spending cuts.

Employers believe that good communication and engagement with staff has been the key to making the workforce changes needed to safeguard jobs during the recession, according… View Article

GENERAL MERCHANDISE

Private Sector experience of recession could help public sector navigate spending cuts.

Employers believe that good communication and engagement with staff has been the key to making the workforce changes needed to safeguard jobs during the recession, according to a new report by the CBI and recruitment experts Harvey Nash.

Picking up the Pace: the CBI/Harvey Nash employment trends survey 2010 offers an insight into how employers and staff worked together during the depths of the recession to keep job losses to a minimum.

Now the private sector is emerging from recession, its experience of engaging employees to change working patterns and cut costs could help the public sector navigate imminent spending cuts, says the report.

The survey of UK employers, which together employ almost 3m people, reveals that nine out of ten employers communicated the impact of the recession on their business to staff.

As a result, 87% of businesses believe staff understood the need to change working patterns, and more than half said staff showed a flexible attitude to change.

As the economy recovers, the survey also shows that employers have been able to phase out some of the more drastic measures introduced during the recession and are hiring again.

A year ago nearly two-thirds of companies had a recruitment freeze in place. This fell to 37% six months ago and now stands at 5%.

But as economic conditions remain challenging many businesses are still adopting a cautious approach to pay, with 16% still operating a pay freeze, while just 3% are planning to make an above-inflation pay award.

John Cridland, CBI’s deputy director-general, said: “Employers have come out the other side of the recession, having managed to keep many more people in jobs than had been expected.

“This has been largely down to the flexibility and goodwill of staff who quickly adapted to emergency measures, including pay and recruitment freezes. Good communication played a key role in helping employees understand the changes needed to safeguard jobs.

“Although there are some signs that job prospects are improving, a good number of businesses are still operating a pay freeze. Those that can afford it are planning modest or targeted pay rises. By contrast, earnings growth in the public sector is outstripping the private sector.”

He added: “So far the public sector has been cushioned from the impact of the recession, but it now faces a squeeze. Drawing on the experience of the private sector in engaging employees during the recession to deliver much-needed change could help the public sector minimize the pain of spending cuts.”

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