Basic pay increase expectations by employers have fallen to 1.3% from 1.5% during the past three months, according to this quarter’s Labour Market Outlook from the†Chartered Institute of Personnel and Development (CIPD) and KPMG.
The survey, which polled 750 employers, also found that average pay settlements in the public sector are expected to fall to -0.33% which compares with 2.3% in the private sector.
Gerwyn Davies, public policy adviser at the CIPD, said: “The first quarter of 2011 was always going to be a quarter of reckoning for the jobs market, and it seems that last year’s modest recovery will be reversed by a modest relapse this year.”
Malcolm Edge, head of markets at KPMG, added: “These figures show that there continues to be a marked divide in the UK jobs market, with the public sector still fearing the worst while the private sector shows signs of better health.
“However, the private sector recovery is not yet fully established and therefore remains susceptible to shocks. However government stimulus with the banks to increase business could provide much needed finance for growth.Medium-sized enterprises are the life blood of the UK economy and this could be a very beneficial boost for them.”
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I was interested to read this article and see the results of the latest quarterly CIPD Employee Outlook survey which found that pay and benefits are now the most important factor influencing employee engagement.
The new survey results are interesting because they show how much the employee landscape has changed in just two years. In 2009 MidlandHR also commissioned independent research which uncovered the driving factors behind employee engagement, but found that pay and benefits were the two factors least likely to promote engagement. The main influencers were relationships with peers, relationships with line managers and recognition of achievement.
Many industries are clearly still in a state of flux following the recession, with figures showing a mere 0.2% growth in UK GDP for Q2 2011. This suggests that boosting pay and benefits is not a viable option for many businesses and in those cases increasing employee engagement through alternative means is vital to motivate and retain talent whilst making people feel secure in their roles.
As such it is essential for organisations to do everything they can to really understand what motivates their employees. We find that more of our customers are looking to provide flexible benefits and clearly communicate their employees’ total reward package, something which still relatively few employees really understand. Regular communication and monitoring of levels of engagement are also important to ensure workforce optimisation and alignment with organisational goals.