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Downturn bites on recruitment and payroll


According to new research by Cubiks, the effects of the current economic downturn have started to bite hard, causing anxious employers to cut back on recruitment expenditure, payroll costs, business travel and expense allowances.

“Managing people through an economic downturn” also shows that the workplace of 2002 is proving to be particularly pressurised with stress levels soaring as people work longer hours to demonstrate commitment and avoid redundancy.

Key findings
71% of survey respondents reported that their company’s profits or revenue had been hit by the downturn and more than half had announced redundancies within the last year. 45% expected their organisation to begin a major restructuring exercise within the next 24 months.

– Recruitment is being used as a key lever to control costs – 65% of organisations stated that they will be spending less on recruitment in 2002 than in previous years. However, 39% intend to begin an active campaign when the situation improves.

– Its not a time for high pay rises – 66% said that the average pay rise awarded in 2002 will be lower than those awarded in 2001, though 75% of companies do have the freedom to offer higher salaries to exceptional staff in order to ensure they stay with company – suggesting that the most talented people can still get the rewards that they demand.

– 60% think that senior managers should set an example to the rest of their employees by accepting a pay-freeze or a pay-cut until conditions improve.

– The various effects of these cost-cutting policies are combining to produce a highly stressful working environment. 52% said that uncertainty is leading staff to work extended hours to avoid redundancy, and two-thirds (66%) believe that individuals who survive a redundancy programme feel more stress as a result. 67% were of the opinion that their organisation does not pay enough attention to work-related stress.

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