Private sector shows jobs growth as public sector pain continues

Job prospects are improving in the private sector, particularly for professional and highly skilled staff, according to the CBI.

“Navigating Choppy Waters”, a joint survey by the CBI and Harvey Nash Employment, polled 335 UK organisations employing nearly three-and-a-half million people. It found that recruitment activity is increasing in the private sector, while recruitment is being scaled back across the public sector as cuts continue to take effect.

According to the survey’s findings, 29% of employers plan to increase permanent recruitment in the next six months either across or in parts of their organisations. A further 26% expect their recruitment activity to stay the same.

However, the report found an increase in the number of recruitment and pay freezes across the economy, which the CBI said is due to ongoing cuts in the public sector. Across the economy, recruitment freezes rose slightly to 9% while pay freezes rose from 14% in October to 23%.

When it comes to pay, the proportion of pay freezes in the private sector remained unchanged at 16%, while 83% of organisations in the public sector are operating pay freezes.

John Cridland, CBI director-general, said: “The pay and recruitment freezes that were commonplace in the private sector during the depths of the recession have now migrated to the public sector. However, we remain confident that private sector growth can more than compensate for job losses in the public sector.

“With the recovery in its early stages and inflationary pressures a worry, employers are having to take tough decisions on pay. Only a quarter of employers can afford to make an award in line with inflation. Most are trying to strike a fair balance by offering either modest awards or targeting pay rises on essential staff. As a result, we are seeing very little in the way of wage inflation in the economy.”

Another of the report’s findings suggests things could continue to be difficult for public sector workers, as 57% of employers said that unrealistic expectations for reward packages could be a barrier to hiring employees from the public sector.

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