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A week in HR: Dark days as unemployment groans

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HR weekThe week has been dominated by the news that we have known for a while – we are officially in recession – and with that the CIPD has declared that we are entering “dark days”. But, in a silver lining for the HR function at least, a salary survey predicts pay for senior HR roles will increase this year. Annie Hayes reports.


The Chartered Institute of Personnel and Development (CIPD) has warned that the darkest days are yet to come, as unemployment figures nudged two million last week. Its chief economist, John Philpott, said that all sectors were recording fewer vacancies, with full-time workers and the over-50s worst hit. Philpott added: “The worst of this jobs crisis is yet to come. We are entering the dark days and should be prepared for a depressing period when – as in the 1980s and 1990s recessions – the benefit claimant count will rise by more than 100,000 each month. And even on the most optimistic of scenarios, around one in 10 people will be unemployed by the time the jobs recovery begins.”

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Sister site, TrainingZone.co.uk reports, however, that there may be light at the end of the tunnel. The UK Commission for Employment and Skills (UKCES) predicts strong growth in some job sectors over the next eight years, despite the current downturn.

Its report, Working Futures, predicts that employment growth in business, education, distribution and transport will remain solid over the long term to 2017. Employment is projected to continue to rise over the decade as a whole, with the creation of 13.5 million job openings, of which two million will be new.

Skills secretary John Denham welcomed the report: “In the short-term we are making sure that people who lose their jobs have access to the real help they need. But we must not lose sight of the future needs of our economy and do all we can to help people get the secure career jobs they want and need in the industries where growth will be the strongest in the coming years.”

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According to the CBI, skills are even more important during tough economic times. The report, Reaching Further: Workforce development through employer-FE college partnership, calls for better and closer links between employers and further education (FE) colleges to help firms plug future skills gaps, drive up productivity and improve the prospects of British businesses in the face of the global downturn. Commissioned by the Learning and Skills Improvement Service (LSIS), the report shows that almost half of firms have links with FE colleges. More than 50% of employers lack confidence in there being enough skilled people to meet future demand.

A key lesson for government policy-makers, according to the report, is that training should be focused on real business needs, rather than just delivering qualifications. LSIS’s ‘World Class Skills’ programme supports providers in their relationships with employers. More information is at http://wcs.excellence.qia.org.uk

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Pay is also hitting the headlines this week. As the Equal Pay and Flexible Working Bill had its second reading in the House of Lords on Friday, the CIPD called for a more concerted effort from government to promote the business benefits of equal pay practices.

Charles Cotton, the CIPD’s reward adviser said: “Employees who feel unfairly treated are unlikely to be engaged and motivated to help the business succeed. Conversely, well-informed, fairly-treated employees are more likely to be powerful advocates and motivated contributors to the future success of their companies.”

Cotton said that the CIPD’s forthcoming 2009 Reward Management survey found that only 54% of employers have conducted or are intending to conduct an EPR, with the majority of these in the public sector. In the interests of pay transparency, he also called for government to outlaw “gagging clauses” that stop employees discussing pay with colleagues.

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And in news from number crunchers, Industrial Relations Services (IRS) www.irsresearch.co.uk reports that employees are currently defying predictions and enjoying pay rises worth more than four times’ inflation. The median basic pay rise for the three months to December 2008 is 3.8%, while retail prices index (RPI) inflation for the same month was reported by the ONS to be just 0.9%. Pay rises have not been this far above RPI inflation since August 1986. Yet, according to IRS, pay awards are unlikely to stay at this elevated level as January pay bargaining gets underway. An early look at pay awards in the three months to January 2009 reveals that pay awards have already slipped to 3%.

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While Matthew Fraser and Soumitra Dutta discuss the numerous pros and cons of the explosion of Web 2.0 into our everyday working lives, a recent report has found that ‘new’ social media such as instant messaging (IM), wikis and social networking style applications and blogs are having an extremely positive effect on the UK workforce.

Published by the Work Foundation, supported by BT Global Services, the study, entitled Changing Relationships at Work has found that 64% of respondents do not work in the same physical place as most of their work friends and colleagues. To keep in touch, many are utilising the ‘new’ technologies such as social networking sites, to maintain strong relationships with colleagues, clients and friends.

Alexandra Jones, associate director at The Work Foundation and lead author of the report, commented: “Organisations that use new collaborative technologies to complement traditional methods of communication are able to continue fostering strong working relationships amongst employees in the most modern and flexible of settings, ensuring an environment in which workers can thrive.”

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According to the Trades Union Congress (TUC), at the lower end of the scale as many as 1.5 million workers are still being cheated out of the national minimum wage (NMW). To tackle rogue employers, the TUC has published an updated edition of Enforcing the National Minimum Wage. TUC general secretary Brendan Barber said that “there must be no hiding place” for those that flout the law. Last year £3.9 million was recovered from law-breaking employers.

The NMW is £5.73 for workers aged 22 and over; £4.77 for workers aged 18; and £3.53 for workers under 18.

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In HR jobs news, a new survey by TalentDrain reveals changing priorities for the function. According to the findings, HR teams are being asked to do more with less.

The survey finds that almost a third of the respondents have changed their HR strategy, switching their focus from recruitment (56% are giving this a lower priority) to areas which more directly impact on organisational performance. Also, 72% of organisations are putting greater emphasis on performance management, 67% on organisational communication and 54% on employee engagement and retention. This change of focus is often linked with the added challenge of a cut in the HR budget – 38% of organisations have reduced their HR budget by more than 5% and 13% have made cuts of over 25%.

The research authors – Ron Eldridge and Anthony Miles – claim that the key challenge for HR teams now is to enable organisational performance.

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In a separate survey by recruiters Robert Walters, it is predicted that the HR jobs market will hold up well during 2009.

According to this survey, while organisations’ resourcing strategies would remain cautious in the year ahead, the growing prominence of HR in overall business strategy will mean that recruitment in the sector should remain relatively stable in 2009. Roles such as HR business partners were still in demand, as were candidates with restructuring and redundancy experience, he added.

Salary levels for senior HR roles are predicted to increase this year, as well as those for experienced practitioners. Yet positions including head of recruitment and recruitment manager could see a downturn in fortunes.

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And finally, don’t miss this interesting HR blog on whether ‘we’ are making the recession worse. As official statistics confirm we are in the midst of a technical recession, so surviving the downturn is not far from many people’s minds. Dip into the three rules to see what can be done.

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