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by: John Holmes
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Date: Fri, 12 Mar 2010 Time: 12:44 AM
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Whilst the latest, revised economic figures suggest that the UK economy is growing slightly faster than was first thought at 0.3%, there remain huge reservations about the strength of the recovery and prospects for the jobs market.

Many organisations that represent employers, recruitment professionals and interim managers have greeted the news with a cautious optimism, tempered by warnings that the risk of a ‘double dip’ recession still looms large.

The situation is further complicated by the fact that a general election is imminent and the threat of significant job losses to cut the nation’s huge budget deficit, regardless of which party leader end ups in number 10.

Ahead of the election, the Recruitment and Employment Confederation (REC) is calling on all political parties to rethink their plans to reduce costs in the public sector.

The organisation representing agencies employing people working in interim management believes an ill-conceived dash for short-term cuts in public expenditure could cause irreparable damage to the delivery of frontline services.
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Instead the public sector needs reform and new models of delivery, not knee-jerk job cuts, it said after the recent launch of its public sector resourcing campaign, Make It Work!

The campaign will promote alternative methods of delivering public sector services by making the most of flexible resourcing such as interim management and acquiring new talent to lead the transformation of public sector organisations.
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According to REC Chief Executive, Kevin Green flexible resourcing must be seen as part of the solution rather than part of the problem.

Proposals put forward by the REC include reducing the cost of back office functions through the centralisation of key functions such as payroll services and the collection of council tax, as well as reviewing its procurement policies.

Green believes the recruitment industry is well placed to help the public sector by finding and attracting the leadership capability needed to lead this level of change within public sector organisations

It can also assist the public sector in resourcing more effectively through the use of interims and specialist contractors.

Outsourcing public sector HR services and recruitment to private sector providers should also be explored as this will reduce costs, which can then be invested back into frontline services.

The HR services that could be outsourced include campaign recruitment, HR intelligence and more general outplacement programmes.


On a more positive note, the latest Report on Jobs survey by the REC and KPMG revealed that the UK labour market picked up further in February, with permanent placements at their highest level since July 2007.

What’s more, the number of staff placed in permanent posts increased overall for the seventh consecutive month, with the rate of growth accelerating.

Temporary placements - such as interim jobs - also increased, although the growth was much smaller. http://www.theinterimchannel.com/

But the figures have not prevented many economists from urging the Chancellor to delay spending cuts until 2011.

More than 60 senior economists have signed open letters saying that any measures to trim the budget deficit this year could pull the country back into recession.

The economists signing the letters in the Financial Times include two American Nobel laureates - Robert Solow and Joseph Stiglitz – and five former members of the Bank of England's interest-rate setting committee.

Lord Layard, emeritus professor at the London School for Economics and one of the signatories, told the BBC that unemployment is high, as people are not spending enough to provide full employment.

In that situation the government has to keep spending in order to stop unemployment rising and government cuts shouldn’t be seen until the recovery well under way and unemployment on its way down, he added.

Worries about job losses are not confined to the public sector either. Should the cuts go ahead many fear this could have a knock-on effect in the private sector.

In many towns and cities across the UK, councils and hospitals are amongst the largest employers in the area and when they shed jobs, the effects are felt in the wider community. Some research suggests that jobs lost in the public sector result in more jobs being lost outside the organisation.

Local government consultant Jeff Jones explained that whilst a lot of people work for public sector organisations, at the same time a lot of people supply goods to them from the private sector. If they're reducing their expenditure, it could have a knock-on effect right across the board, he is reported as saying.

As a result of such uncertainty, it is no surprise that businesses are still being cautious in their recruitment, although many are resorting to time and attendance and improving business productivity first. Although more businesses report they are planning to take on staff, competition remains fierce for jobseekers.
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Paradoxically, the Chartered Management Institute (CMI) says its members were finding it hard to recruit staff, despite the latest figures showing that UK unemployment currently stands at 2.47 million.

A recent survey by the CMI found filling vacancies is a problems for 46% of firms, with 77% saying they cannot get people with the skills they want.

This research is supported by the REC which said members had also found recruitment was taking longer than it used to as firms who hired fewer people tended to be more selective.

Although the REC does state why they are being more selective, it is not unreasonable to assume that in difficult times it pays to take the time to ensure you have the right person for the job. Many are turning to additional recruitment tools, such as psychometric tests, to ensure they find the right candidate, whilst more stringent reference checks may also extend any recruitment campaign.

John Holmes. - Has been involved, at senior levels, in the Payroll, HR services, career management, psychometric testing, time and attendance and interim management industries for over 10 years.
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