Ups and downs of the labour market, losers and losers Employers' confidence increasing – but the damage has been done

Despite March news that there has only been a slight improvement in unemployment figures, the Recruitment and Employment Confederation (REC) survey shows 94% of employers expect either to maintain or increase their permanent workforces in the next 12 months.

The survey also shows that one in four employers are planning to increase their temporary workforce in the next year, highlighting the important flexibility that contract and temporary work provides to employers and jobseekers looking to get back into the jobs market. Businesses are naturally cautious about the economic recovery, which is why the provision of temporary and contract work will continue to provide a useful outlet.

The news comes as a survey by HR magazine found 63% of readers plan to recruit staff in the first half of 2010.

During the recession, graduate recruitment in many companies was stopped dead in its tracks, employees made redundant and staff replacements eliminated. Job hoarding to date has led to high youth unemployment rates. Prof David Blanchflower (former member of the MPC) considers there is a strong case to help NEETS but that a lost generation of unemployable has already happened. His warning is that “unemployment lowers happiness more than inflation”.

But resignations have increased in the year to February 2010, despite growing fears over job security. The 2010 National Management Salary Survey, published by the Chartered Management Institute (CMI) and XpertHR, reveals a labour turnover rate of 13.6%, up from 12.4% in 2009. Resignations stand at 4.7%, compared with 4.5%, last year.

The survey results also imply employers are failing to persuade staff to stay, with requests for ‘internal transfers' as an alternative to leaving dropping to 3.6% from a high of 5.8% last year.

According to the survey of 43,312 individuals in 197 organisations, earning power has dropped dramatically in the past year, with take home pay heavily influenced by where people work and what they do.

Asked what lies behind this desire to change jobs, more than half the employers questioned (53.8%) admitted restructuring and job insecurity caused many of their staff to ‘jump ship'.

Almost four out of 10 (38.5%) recognised their ‘failure to offer career opportunities and training' contributed to employees leaving and 61.5% admitted headhunters and recruitment consultants had turned their employees' heads. With unemployment figures currently quoted at 2.47 million, an additional unexpected result from this year's survey is that employers are struggling to recruit staff. According to the data, 46% of employers admitted they couldn't fill vacancies, with the majority (77%) citing the lack of specialist skills among candidates as a key reason. Almost one quarter (24%) blame the salaries they are able to offer and 15% suggest their location is a factor.