The Hudson Update   Q2 2011
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  • 1. QUARTER 2 - 2011 THE HUDSON UPDATE EMPLOYEE TRENDS – England’s North, Midlands, Home Counties & South West
  • 2. INTRODUCTIONWelcome to The Hudson top three highest respondent ∟ Advertising/Marketing/Update. In this edition, for the groups were the Professional Mediafirst time, we include hiring Services (16.9%), Financial ∟ Construction/Property/expectations and employee Services/Insurance (12.2%) Engineeringtrends in England’s Home and Retail (8.7%) sectors. ∟ EducationCounties and South West There was also significantalongside the Midlands, North representation from the IT, ∟ Financial Services/West and North East. The Manufacturing and Public Insurancefindings in this report relate to sectors with an even spread ∟ FMCGexpectations for Q2 201 and 1 amongst the remainder. The ∟ Healthcare (Public Sector)are based on in-depth research vast majority of respondentsof the region, conducted by (70.7%) were from companies ∟ Information Technologyinterviewing clients across a of 200 people or more. ∟ Manufacturingbroad spectrum of industries The industry sectors surveyed ∟ Non-Profitand job sectors. across the North, Midlands, ∟ PharmaceuticalThe Hudson Update is Home Counties and Southissued quarterly and provides West of England were: ∟ Professional Servicesperiodical research and ∟ Public Sectorinterpretation of employer ∟ Resourcestrends and expectations.References to historical ∟ Retaildata will be made so that ∟ Telecommunicationscomparisons, trends and ∟ Tourism & Hospitalitypredictions may be identifiedacross the industry. ∟ TransportThe survey was completed by ∟ Utilitiesnearly 1,000 employers. The ∟ Wholesale/Distribution
  • 3. ABOUT HUDSONHudson is one of the From single placements to Hudson UK & Irelandworld’s leading providers outsourced solutions, we operates across 1 offices 1of permanent recruitment, translate human capital in the region, all providingcontract professionals, strategies into practical actions localised specialist servicesoutsourced solutions and and measurable results. to each market. In the Englishtalent management services. Beyond placing candidates Regions, we specialise in theWith over 2,000 employees in into contract, interim, and following functions; Accountingapproximately 20 countries, we permanent roles, we help & Finance, HR, IT, Legal,help our clients achieve greater clients implement effective Marketing & Communications,organisational performance long-term recruiting and Public Sector, Sales and Supplyby assessing, recruiting, retention strategies. Our Chain & Procurement. Ourdeveloping and engaging the underlying goal is to improve client list is varied, ranging frombest and brightest people for performance at every level. privately owned businessestheir businesses. and SMEs through to FTSE 100 and household Blue Chip companies.
  • 4. HIRING TRENDS IN THEMIDLANDS & NORTH OFENGLANDNET INCREASE OF 26.6% IN PERMANENT DOES YOUR TEAM/BUSINESSHIRING EXPECTATIONS FOR Q2 2011. UNIT EXPECT TO INCREASE/ DECREASE ITS PERMANENTNET INCREASE OF 0.7% IN CONTRACT/ STAFF LEVELS IN YOURTEMPORARY HIRES EXPECTED. COUNTY DURING THE APRIL TO JUNE 201 PERIOD? 1Since the inception of The The reasons we are seeing 1 7% 1.Hudson Update in early 2010, these results could be due towe recorded four consecutive a number of factors. Earlier in 38.3%quarters where hiring the year, there were reports ofexpectations have grown. Now a “double-dip” recession in the 50%into its fifth quarter, it is the first UK and this may have sparkedtime we are seeing a tempering caution amongst employersof hiring expectations, as in the Midlands and North. Ingrowth in recruitment is now addition, it is clear from our Increasedeclining. Permanent hiring previous reports that companies No changeexpectations have declined only have been hiring permanent Decreaseslightly compared to Q1 2011 staff meaning many may have DOES YOUR TEAM/BUSINESS(net increase of 27%) however fulfilled their requirements. UNIT EXPECT TO INCREASE/contract/temporary hiring Further to this, many employers DECREASE ITS CONTRACTING/ TEMPORARY WORKFORCEexpectations fell more sharply may be focusing on recruiting OVER THE APRIL TO JUNE 2011(net increase of 6.7%). permanent employees resulting PERIOD? in the decline in contract/While expectations have temporary hiring expectationssomewhat eased, these 15.8% 16.5% we have witnessed.findings still represent stronggrowth when comparingdata to 2010 – particularlyin the permanent hiringsector. The first edition 67.7%in 2010 recorded a netincrease of 1 (permanent) 1% Increaseand a net decrease of 6% No change(contract/temporary) in hiring Decreaseexpectations.
  • 5. HIRING TRENDS IN THE HOME COUNTIES & SOUTH WEST OF ENGLANDNET INCREASE OF 24.4% IN PERMANENT DOES YOUR TEAM/BUSINESSHIRING EXPECTATIONS FOR Q2 2011. UNIT EXPECT TO INCREASE/ DECREASE ITS PERMANENTNET INCREASE OF 7.7% IN CONTRACT/ STAFF LEVELS IN YOURTEMPORARY HIRES EXPECTED. COUNTY DURING THE APRIL TO JUNE 201 PERIOD? 1 13.9% 38.3%As this is the region’s first regions, this may have an effectappearance in the Hudson as these organisations are stillUpdate, there is no historical concerned by headcount – a 47.8%data to make comparisons with. solution for which is often anThere are some indications increase in temporary staff. Inof slight differences in hiring addition, as may be the case Increaseexpectations between Northern with the North, media reports No changeand Southern respondents of a “double-dip” recession may Decreasehowever. Expectations for have encouraged managerspermanent hiring are slightly to focus more heavily on lower DOES YOUR TEAM/BUSINESS UNIT EXPECT TO INCREASE/lower in the South (by around risk contract staff. Either way, DECREASE ITS CONTRACTING/2%) but significantly higher (by it is encouraging to see that TEMPORARY WORKFORCE OVER THE APRIL TO JUNE 20117%) for temporary/contract more Southern businesses are PERIOD?recruitment. aiming to recruit in one way or another.It can be concluded that 18.2% 26%Southern managers are morefocused on short term hiring forthe coming months which couldbe due to a number of factors.With the public sector being 55.8%more prevalent in the surveyed Increase No change Decrease
  • 6. EMPLOYEE TRENDS IN THENORTH, MIDLANDS, HOMECOUNTIES & SOUTH WESTENGLAND’S EMPLOYERS PAY THEIRSTAFF WELL. OVER 70% OF NORTHERNAND MIDLANDS RESPONDENTS SAIDTHEY FEEL THEIR COMPANY OFFERS ACOMPETITIVE REMUNERATION PACKAGE.OVER 73% OF SOUTHERN RESPONDENTSANSWERED THE SAME.The majority of employers in the In all regions, the salary IN YOUR OPINION, DOESMidlands, North and South of review process most used by YOUR COMPANY OFFER A COMPETITIVE REMUNERATIONEngland provide a competitive managers was overwhelmingly PACKAGE?remuneration package to their in favour of the annualstaff according to over 70% performance review. Over 11%of our respondents. Just 17% 60% of respondents chosesaid they did not, meaning this method which certainly 17%employees in these regions are has many benefits including agenerally being paid well. system to monitor performance and an ability to set motivating 72%Considering that the country targets with tangible rewards.is emerging from a deepand costly recession, thisis encouraging news. Many Yesorganisations had to cut costs Noand it was salaries that became Unsurea prime target. It is possiblethen that many businesseshave now reinstated these cutsand salaries are beginning torise again.
  • 7. OVER A QUARTER OF RESPONDENTS -27% IN THE NORTH & MIDLANDS AND26% IN THE SOUTH - DON’T OFFERBONUSES TO STAFF AT ALL WHILEAROUND 23% (NORTH & MIDLANDS) AND18% (SOUTH) ONLY OFFER BONUSES TOCERTAIN STAFF MEMBERS.With around 27% of In addition, while it is DOES YOUR COMPANY OFFERrespondents failing to offer reasonable and generally BONUSES TO STAFF?bonuses and up to 23% only accepted that fee earners gainoffering them to certain staff, bonuses for their work, those 21%mainly fee earners, it appears companies who pay them onlythat support staff in these to these employees shouldregions only have a 50/50 consider the impact of this on 53.4%chance of receiving a bonus. non-fee earners. Businesses 25.6% need to ensure they engageFrom an employer’s perspective, these staff members inbonuses can be a distinctive other ways such as separateadvantage when attracting benefits or investment in their Yestop quality candidates, leaving development. Nothose who don’t offer bonuses Only to certain employeeswith a significant challenge.While it can be argued that thisparticular benefit may not be akey motivator when a person isin their role, it certainly impactsthe decision making processwhen candidates are decidingbetween job offers.
  • 8. SOME BENEFITS (LIFE ASSURANCE, Some benefits split opinionCHILDCARE AND TRAINING) SPLIT amongst our respondents. Life assurance (53%) andOPINION WHEN ASKED IF THEY CAN BE subsidised training (52%)EXPECTED AS PART OF THE MINIMUM were only slightly consideredPACKAGE OR IF THEY ARE A PERK. as an expectation. While lifeANNUAL SALARY REVIEWS, PENSION, assurance may be seen as aMATERNITY LEAVE AND PAID HOLIDAYS tactic that may or may not beARE SEEN BY THE VAST MAJORITY AS A used to attract candidates, it is“MUST-HAVE” BENEFIT. somewhat surprising that more businesses don’t place moreMany of the “traditional” expectations by offering this value on subsidised training –benefits that companies offer as a benefit. Furthermore, especially as this can have aare still seen as a staple of 62% of respondents felt that direct, beneficial impact on thethe remuneration package health/medical insurance is business. Further to this, childby the vast majority of our a perk leaving a significant care facilities/vouchers wererespondents. Annual salary 38% seeing it as a minimum seen by a slight majority (57%)reviews (87%) and pension expectation. It is likely that as a perk. This is likely to becontributions (83%) are two this benefit will increase in due to the cost of providingbenefits receiving a lot of importance as more and more such a benefit, however it maysupport from businesses. Of employers offer it. Candidates also raise the question in anthose benefits with statutory will begin to expect this in ongoing debate, of whetherrequirements attached to them, their package and employers women receive enough supportit would seem that employers will have to offer it to remain in the modern workplace.will consider enhancing these competitive.benefits for staff members.Ninety one per cent of our PLEASE INDICATE WHETHER YOU FEEL THE FOLLOWING SHOULD BE EXPECTED AS A MINIMUM BY YOUR EMPLOYEES IN Arespondents held this view with REMUNERATION PACKAGE OR IF YOU CONSIDER IT TO BE A PERK.regards to maternity/paternity 900leave while 76% feel that 800 Minimum expectationadditional paid holidays should 700 600be added over statutory. Number of respondents 500It is interesting to note that 400 30067% of our respondents Perk 200indicated that they see 100bonuses as a perk. When 0 Annual salary review Pension contributions Life assurance Health/Medical insurance Child care vouchers/facilities Subsidised training Bonus Maternity/Paternity leave Paid holidays (over statutory)you look back at our earlieranalysis on this subject, thismay be an indication that alarge number of employersfeel that they are exceeding
  • 9. COMPETITOR ANALYSIS IS THE MOSTPOPULAR METHOD OF BENCHMARKINGSALARIES - 43% IN THE MIDLANDS &NORTH AND 41% IN THE HOME COUNTIES& SOUTH WEST.With most employers across the (32%), both of which provide industry body guidelinesregions surveyed saying that a valuable service in this area (33%) however this is usedthey benchmark their salaries across multiple industries and significantly more than agencyusing competitor analysis, job types. salary surveys (23%). Further toit is interesting to note that this, advertised salaries are also A large number of managers inthis information is available a popular benchmarking tool the Home Counties and Southwithin industry circles. It is a with 24% selecting this option. West also used professionalvaluable source of informationas it enables businesses toremain competitive when in themarket for highly sought after HOW ARE SALARIES BENCHMARKED BY YOU IN YOURcandidates. ORGANISATION (CHOOSE AS MANY AS IS APPROPRIATE)? 45%There were some slight 40%differences between Northern 35%and Southern businesses 30%when looking at other methods 25% 20%in benchmarking. In the 15%Midlands and North of England, 10%managers also used agency 5%salary surveys (34%) and 0% CIPD Professional industry body guidelines Recruitment agency salary guides/surveys Recruitment consultant advice Competitor analysis Candidate disclosure of salaries Advertised salaries We don’t benchmark Otherprofessional industry guidelines
  • 10. EMPLOYMENT EXPECTATIONS BY INDUSTRYINDUSTRIES EXPECTINGAN INCREASE IN HIRINGAlthough the market across expected to increase their When looking at the temp/the English regions as a whole permanent headcount in Q2 interim market by industry, theis showing signs that growth 201 A significant proportion 1. biggest expected increase inin recruitment is generally (57.4%) of professional services temporary staff hires mimickeddeclining, there is in fact a organisations and 60% for permanent hiring trends,wide variation in sentiment resources organisations as once again it was theacross industry sectors. Some also foresaw growth in their resources industry forecastingindustries actually expected organisation, demonstrating the greatest increase (40%to increase their permanent a return of confidence to of these organisations) inheadcount significantly, whilst these markets. This was temporary staff numbers.others were much more likely to compared with just 15% of Similarly, pharmaceuticalkeep their headcount stagnant, pharmaceutical companies organisations were again theor even reduce it. A similar planning to make permanent least likely to recruit, withrepresentation was seen in hires. Unsurprisingly, public just 10% of pharmaceuticalthe expectations of temp and sector, health care and not companies saying that theyinterim trends. for profit organisations also would be increasing their loitered low in this respect, all temporary staff numbers in theMore than half (54.4%) of the of which hovered around the following period.financial services/insurance 16-18% mark.organisations surveyed
  • 11. INDUSTRIES EXPECTINGNO CHANGE IN HIRINGThe majority (50%+) health care, manufacturing, non to permanent staff levels inof organisations within – profit, pharmaceutical, retail, Q2 201 This was similarly 1.advertising/marketing/ tourism & hospitality, transport reflected in temporary staffmedia, construction/property/ and utilities all predicted that expectations.engineering, education, FMCG, there would be no changeINDUSTRIES EXPECTING ADECREASE IN HIRINGWhen looking at the industries resourcing organisations, once services fared best with onlyexpecting to decrease their again holding strong, expected 7.1% of organisations expectingpermanent headcount, it absolutely no decreases in to reduce their temporarywas naturally public sector staff. employee numbers next quarter.organisations that fared badly, In contrast, 40% of public When looking at reducingwith up to 35% of respondents sector organisations envisaged the number of temporaryfrom the industry saying they a reduction in their temporary employees, professionalexpected cuts. In contrast, workforce.
  • 12. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Advertising/Marketing/ Advertising/Marketing/ Increase IncreaseDecrease Decrease Media Media No change No change Construction/Property/ Construction/Property/ Engineering Engineering Education Education Financial Services/ Financial Services/ Insurance Insurance FMCG FMCG Healthcare (Public Healthcare (Public Sector) Sector) Information Technology Information Technology 1 Manufacturing Manufacturing Non-Profit Non-Profit 1 WORKFORCE OVER THE APRIL TO JUNE 201 PERIOD? Pharmaceutical Pharmaceutical Professional Services Professional Services IN YOUR COUNTY DURING THE APRIL TO JUNE 201 PERIOD? Public Sector Public Sector Resources Resources Retail Retail Telecommunications Telecommunications Tourism & Hospitality Tourism & Hospitality Transport Transport Utilities Utilities Wholesale/Distribution Wholesale/Distribution DOES YOUR TEAM/BUSINESS UNIT EXPECT TO INCREASE/DECREASE ITS PERMANENT STAFF LEVELS DOES YOUR TEAM/BUSINESS UNIT EXPECT TO INCREASE/DECREASE ITS CONTRACTING/TEMPORARY
  • 13. REMUNERATION BY INDUSTRYOur survey indicated that work for – with huge proportion sector health care organisationthe majority of organisations (81.7%) of manufacturing felt their employee packagebelieve they offer a competitive employers saying that was competitive, which mayremuneration package their organisation offers a be reflective of the pessimism(averaged out across all competitive remuneration occurring in the currentindustries to nearly 70%). package. Pharmaceutical was employment market in public not far behind, with 80% of sector.But what of specific industries? organisations saying the same.According to employers’ beliefs, In contrast, only 50% of publicmanufacturing is the industry toIN YOUR OPINION, DOES YOUR COMPANY OFFER A COMPETITIVEREMUNERATION PACKAGE?100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Advertising/Marketing/ Media Construction/Property/ Engineering Education Financial Services/ Insurance FMCG Healthcare (Public Sector) IT Manufacturing Non-profit Pharmaceutical Professional Services Public Sector Resources Retail Telecommunications Tourism & Hospitality Transport Utilities Wholesale/Distribution
  • 14. THE HUDSON RECOMMENDATION:ENSURE YOUR FOCUS ON STAFFMOTIVATION REACHES BEYOND JUSTTHEIR PAY PACKETMany companies make the the most out of their workforce. extra responsibility, or moremistake of using salary as Some of the most powerful important responsibility, toa motivator, or at least their forms of motivation don’t come staff members. If they seeprimary motivator. Research from monetary rewards, but they have been trustedin the UK and the US has from focusing on the key points to carry out these tasks,shown that an employee’s that affect an individual’s drive they will be motivated tosalary, in isolation, does not to succeed. Some examples: ensure that your trust isin itself motivate staff to not misplaced. ∟ RECOGNITION – Peopleperform better. The only time are always buoyed when ∟ EMPOWERMENT –that a remuneration package their achievements Nothing says “I believe inbecomes an issue is if the are recognised. This you” like empowering youremployee feels that they are can be applied to staff employees. It can yieldnot being paid enough. In by ensuring, when excellent results if youthis case the employee may appropriate, that their allow your staff to makebecome de-motivated and work is praised and important decisions thenthis is probably down to their acknowledged by senior to see these decisionsfeeling a sense of self-worth figures in the organisation. carried out. In addition,and value to the company. Make sure to share a make your people feelSo it is important to get the colleague’s success heard. Actively encouragesalary package right, so that with team mates and your team to come up withyour employees know they reward staff with career ideas and make sure youare valued by the organisation, development opportunities. commit to seeing the besthowever it should not be used ideas implemented. Thisas a reward. ∟ TRUST – Even in everyday can be highly beneficial life, people are happyThe true motivation of staff for both employee and when they gain another’scomes from cognitive sources, employer. trust. The same can beand companies can implement said in the workplace. Thisa variety of techniques to get can be done by assigning
  • 15. IT’S ALL HAPPENING UPSTAIRS…Much of what motivates a For employees, they will have As with any contract, writtenperson at work stems from certain expectations of their or otherwise, there is two orthe PSYCHOLOGICAL employers in relation to job more parties involved, and thusCONTRACT. There are many content, career development, in order for the relationship tofactors beyond the written social atmosphere, training, be successful, employers willcontract that influence the financial rewards, work-life have their own expectationslevel of engagement an balance and security. Where of employees, but this will beemployee demonstrates. Whilst an employer does not meet in terms of their performance,remuneration packages may expectations, an employee collegiality, flexibility,play a role in de-motivation if may become disillusioned and loyalty, professionalism andinsufficient, it is most often disenchanted with their role – employability. Any mismatchfactors of the psychological leading to wavering levels of between delivery andcontract which determine motivation and productivity. expectations will damage theemployee levels of motivation relationship.and productivity. Employees It is for these reasons thatcome to expect certain things employer and employeethat are not explicitly expressed must ensure open and clearin writing from their employers, communication about alland vice versa, and without a of these factors, so thatclear view on these things a expectations are addressedrelationship can go sour and and understood from the onset,the best is not derived from to ensure both parties areboth parties. satisfied and optimum success can be achieved.
  • 16. YOUR POINTS OF CONTACTThank you for taking the time JAN COLLIGAN FRANK WADSWORTHto read this update. To discuss Birmingham Manchesterfurther, please get in touch with t: 0121 634 5176 t: 0161 819 7541your local Hudson contact: e: jan.colligan@hudson.com e: frank.wadsworth@hudson.com STEVEN UNDERWOOD GARY FAY Bristol Milton Keynes t: 01173 330 000 t: 01908 547 817 e: steven.underwood@hudson.com e: gary.fay@hudson.com LEE BHANDAL JEMMA RAWLINS Leeds Reading t: 01 297 9545 13 t: 01189 522 466 e: lee.bhandal@hudson.com e: jemma.rawlins