Recession work practices are ‘here to stay’ - FT

Recession work practices are ‘here to stay’ - FT
By Gill Plimmer
Published: May 10 2010 02:15 | Last updated: May 10 2010 02:15 

Employers will retain the flexible working practices introduced during the recession even when the job market improves, Manpower, one of the world’s biggest staffing agencies, has said.

High-profile deals have seen desperate staff signing up for reduced hours or less pay, instead of risking their jobs – although in some cases, as at JCB, the construction equipment maker, layoffs have eventually followed. Employers such as Xerox, the photocopier supplier, pay staff only when they fix machines, while call centres have started to pay workers only for the hours they are logged on to their computers.

But if staff believe agreements such as these are temporary, Mark Cahill, managing director of Manpower UK, which has 8,000 corporate clients in Britain, says employers are keen for the new-found labour market flexibility to become permanent even when demand returns.

“The private sector has got used to getting a greater return from their workers and they will be reluctant to return to pre-recession conditions when the downturn is over,” he said. “Flexible engagement has worked fantastically well, so has rewarding output rather than attendance.”

At nearly 2.5m, unemployment is high – but not nearly as high as it might have been given the length and severity of the downturn during the past two years.

Employers have held on to staff by offering unpaid leave or pay cuts, so are able to ratchet up employees’ hours when demand for services or goods improves.

This means there is little evidence yet of a big rise in the hiring of temporary workers, typically the first sign the labour market is emerging from recession, says Manpower, which employs more than 20,000 people every day.

Manpower, along with rival staffing groups Adecco and Ranstad, have reported an improvement in the jobs market worldwide after a year in which many staffing groups lost 30 of cent of their revenues.

But with the new British government pledging to axe state-funded jobs, there are fears that there could be a second wave of unemployment, with the public sector following its private counterpart in shedding staff.

Mr Cahill urged the public sector to resist drastic job cuts, arguing it should focus on raising productivity. Neighbouring boroughs could merge human resource departments and share contract staff, for example, rather than duplicating services.

In spite of high unemployment there remains a skill shortage in some industries. In engineering, new “green” energy initiatives are expanding the scope of the industry leading to a dearth of experience; there is also a lack of experienced information technology gaming staff.

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