Latest news : Recruitment recovery

Employers are gearing up for the recovery by targeting recruitment in areas that will maximise growth, according to a survey by the CBI and Harvey Nash.

Gearing up for Growth, the CBI/Harvey Nash Employment Trends Survey covers 330 UK employers, which employ nearly two million people. It reveals the number of businesses operating a recruitment freeze has fallen from a peak of 61% in spring 2009 to 7% this autumn, with these concentrated in the public sector and construction.

Firms are taking a cautious approach to hiring in the year ahead. A quarter (23%) are planning targeted recruitment in areas including management, technical and sales, while a fifth (21%) plan to add staff in some parts of the business and reduce numbers elsewhere.

Pay freezes have thawed, falling from a peak of 55% of employers last spring to 14%. But pay restraint remains the norm as firms try to control costs. A fifth (22%) are planning targeted pay rises for key staff, while 42% are planning a below-inflation award for all employees. One in ten employers is planning an award in line with or above inflation, based on the Retail Prices Index.

While most firms (67%) describe the current employee relations climate as co-operative or better, many businesses are concerned that relationships will become more difficult next year.

The survey also reveals that the recruitment and pay freezes seen by the private sector during the recession are starting to migrate to the public sector, as the Government takes the necessary steps to reduce the deficit. In the next six months, a fifth (21%) of public sector employers are planning a recruitment freeze, and 58% a pay freeze.

‘Firms are cautious about recruitment and pay, given the fragility of the economy. But they know they can't afford to take staff for granted, and must redouble efforts to keep employees on board as they gear up for growth,’ said John Cridland, CBI Deputy Director-General 

As well as recruitment and pay, the report examines strategies for engaging with employees, the impact of removing the national default retirement age (DRA), and the growth in flexible working.