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20 June, 2011 - 22:00 By News Desk

Private sector jobs recovery sustained but wages pegged

CBI Director-General, John Cridland

Job prospects are picking up across the private sector, particularly for professional and highly-skilled staff.

But there is little wage growth in the economy as pay restraint remains the norm, according to a survey by the CBI and recruitment specialists Harvey Nash – ‘Navigating Choppy Waters.’The survey covers 335 UK employers which together employ nearly three and half million people. It shows a private sector seeing job prospects pick up as the economy strengthens while the public sector scales back recruitment as the Government’s austerity measures start to bite.Across the economy, the survey shows that 29 per cent of employers plan to increase permanent recruitment in the next six months either across or in parts of the their organisations.With the public sector now taking steps to cut costs, the number of recruitment and pay freezes across the economy has risen: recruitment freezes rose slightly to nine per cent while pay freezes are up from 14 per cent in October to 23 per cent. In the private sector, the proportion of pay freezes remained unchanged at 16 per cent, while in the public sector 83 per cent of organisations are operating pay freezes.The manufacturing sector has been enjoying particularly strong growth, and is a recruitment hotspot, as is the whole area of smart phone software application development. A third of employers in manufacturing are planning more generous pay rises. The outlook for graduate recruitment is also brightening, though competition for jobs remains very high.On the UK’s attractiveness as a place to do businesses, the survey found that nearly two-thirds of employers believe the UK has become a less attractive place to invest and do business over the last five years, but are hopeful that things will improve.On flexible working, the survey found that nearly all employers (96 per cent) offer at least one form of this and 70 per cent offer three or more types. This includes part-time working, flexi- and term-time working, as well as job sharing.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.”Looking at the survey’s findings on recruitment and pay in more detail:• 29 per cent of all employers plan to increase permanent recruitment in the next six months either across or in parts of their organisations, while a quarter (26 per cent) expect no change to their level of recruitment• Openings for temporary staff are increasing modestly with a balance of +7 per cent of firms anticipating recruitment compared to those expecting a reduction• Job prospects are slowly improving for graduates, with the overall balance between firms expecting higher and lower graduate recruitment at +9 per cent• With pay restraint the norm, 31 per cent of firms are planning a general increase below RPI; 17 per cent are planning targeted increases for some staff only; 20 per cent are planning a general increase in line with RPI and four per cent an above-inflation award• 57 per cent of employers say unrealistic expectations for reward packages could be a barrier to hiring employees from the public sector.• Photograph shows: CBI Director-General, John Cridland

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