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A week in HR: Interest rate cut won’t save jobs

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HR weekThe CIPD is warning that the shock interest rate cut, announced last week, is “probably too late” to stem the flow of job cuts already in the pipeline and, in further bad news for the labour market, unemployment has reached an 11-year high. Elsewhere, a Sunday Times job advert reveals what top HR workers can earn. Annie Hayes reports.



Unemployment is at an 11-year high. Official statistics released from the Office of National Statistics reports that in the three months to September the jobless count jumped by 140,000 to 1.82 million. The number of people claiming Jobseeker’s Allowance rose by 36,500 to 980,900 in October – the highest monthly increase since 1992. Unsurprisingly wage growth is also on the slide. Commenting on the figures, John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD) said that there will be further bad news to follow:

“We saw the first phase of the credit crunch emerge in autumn 2007 but it has taken time for the shockwave to hit the jobs market. Worryingly, just as the impact was being felt, this autumn saw the second phase detonate with even greater negative effect on employer and consumer confidence. The shockwave from this second phase lies ahead and is likely to be stronger still.” For further comment see BBC Online.

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And according to the CIPD the interest rate cuts won’t save jobs either. The Bank of England’s shock 1.5 percentage point cut in interest rates, announced last week, is the right “medicine” to fight an impending recession but “probably too late” to prevent job losses already in the pipeline. This is according to John Philpott, chief economist for the CIPD.

Despite the warning over jobs, in a separate report, the CIPD found that most organisations (60%) still plan to throw an office bash to mark the festive season. According to the findings, private services sector companies are still the keenest to embrace the Christmas festivities with 77% still likely to provide a Christmas party or lunch this year (a small shift from 84% in 2007). However, the voluntary and the public sectors fair less well. While the voluntary sector is more likely to reward staff with a Christmas party (51% compared with 24% in the public sector), the number of organisations in this sector throwing Christmas parties has decreased by 12% this year. Full details will be revealed at the CIPD’s annual reward conference 2009 taking place on 3-4 February, in London.

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Victims of bullying won’t be celebrating this year, however, if data released by the TUC is to be believed. Marking Ban Bullying at Work Day last week, the TUC warned that the economic downturn could increase instances of bullying at work. In the survey, 47.8% of respondents stated that when they made a formal complaint, procedures were not followed correctly. Government figures estimate that workplace bullying costs the UK economy £13.75 billion, with 100 million days productivity lost, per year.

The Andrea Adams report reveals that this isn’t just a case of managers bullying subordinates, as just under half of respondents stated that they were being bullied by their superior. This point was reflected in a study by the Chartered Management Institute, which found that 63% of respondents had seen bullying between peers and 30% saw subordinates bullying their manager.

Bullying at work: the experience of managers found 70% of managers claimed to have witnessed instances of bullying in the past three years. Of those experiencing bullying, 38% said no action was taken by their organisation. Almost two-thirds of respondents were concerned about their employer’s inability to deal with the problem.

However, there was some good news, with signs that employers are beginning to understand the need to take a stand against bullying behaviour. In 2005, just 55% of organisations had a formal bullying policy – a figure that has risen to 74%, this year. Where policies exist, 65% say their organisation deters bullying well (compared to just 44% of those with no policy). Asked what makes a policy effective, 82% of managers said “training from the point of induction”. A similar proportion (80%) focused on the need to define bullying and 45% favoured awareness training.

Full results of the Andrea Adams report and a fact sheet on bullying at work can be downloaded here.

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In other news, opposition to the removal of the UK’s opt-out of the 48-hour working week has come from several business groups including the CIPD and the CBI. The CIPD said the decisions should be left in the hands of employers and employees. Mike Emmott, the CIPD’s employee relations adviser, said: “Good employers do not make their staff work longer hours, but business demands may occasionally arise, requiring employees to put in extra hours. Additionally, the removal of this flexibility neglects to recognise that employees may value the freedom of choosing whether to work more hours or not.”

The CBI expressed similar sentiments. John Cridland, CBI deputy director-general, said: “We think people can look at their own circumstances and make their own decision about working longer hours. We call this common sense, and it doesn’t need amending by Brussels.”

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On job prospects, new research shows that more than 8 million adults in England are preparing to ‘skill up’ over the next year. One in five adults have pledged to gain further qualifications over the next 12 months with a third of these wishing to upgrade their skills during the economic downturn.

The new research commissioned by the Association of Colleges has found that 8.4 million people switched career in the last three years with 3.2 million planning to do so over the next year. Skills Secretary John Denham said: “Research like this shows that many people are looking at ways to change their lives. In these challenging times, we have made radical changes to, and unprecedented investment in, the training and skills system to allow more people than ever before to fulfil their potential and realise their aspirations.”

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Those at the top of the HR tree might be staying put, however. Sirona points to an advert on the front page of this week’s Sunday Times Appointments which, she says in her HR blog, answers the question about just how much money can be made in HR. HRZone.co.uk recently reported that, in general, HR employees are still receiving bonuses, many of them higher than those in 2007, whilst senior level workers in the recruitment sector are reported to be paid 11% more than others at that level.

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In further pay news, a new report from IDS Diversity at Work in conjunction with IDS Pay Report shows that 74% of companies provide more than the statutory maternity pay requirement. The survey also reveals that just over half of respondents think that the current statutory minimum maternity pay for women is too low and only 1% think it is too high. The survey also shows that employers are increasingly using enhanced maternity benefits and incentives to retain key skills in the workforce.

The government recently announced it is considering delaying the extension of the maternity pay period from 39 to 52 weeks. Commenting on the proposals TUC general secretary Brendan Barber said: “The government should not use the recession as a reason to delay planned improvements to maternity pay and family-friendly working. Increasing maternity pay would not be a huge extra cost to business and would help companies recruit and retain highly-skilled female employees.”

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Annie Hayes

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