Employers experience budget cuts, escalation of workloads and higher stress levels

Employers experience budget cuts, escalation of workloads and higher stress levels to cope with recession, according to latest CIPD/KPMG quarterly survey

In a further sign of the deteriorating state of the economy, the latest quarterly CIPD/KPMG survey of 892 employers shows that around two-thirds of UK employers have either experienced an organisational budget cut in 2008 or are about to experience one.

The cuts look set to affect travel, fringe benefits and the opportunity to work overtime in particular which include significant differences between the private, public and voluntary sectors.  For instance, three-quarters of private sector employers (74%) have reduced their travel expenses, compared with 50% in both the public and voluntary sectors.  The recession also appears to be encouraging more employers to adopt greener working practices.  Almost two thirds (62%) have increased their use of tele/videoconferencing while forty three per cent have increased their use of public transport.

While redundancies have understandably been making the headlines, ‘surviving’ employees have also been affected by the credit crunch.  While a majority of HR professionals feel less secure in their jobs, around half say that employee workloads and stress levels have increased in their organisation.  Staff motivation does not appear to have deteriorated however, which could be a sign of higher levels of job insecurity or indicative of the increased effort employers are making to communicate regularly with their staff.  A majority of employers say that they are communicating with their staff more regularly during the credit crunch; with almost three in five reporting that they are using more regular communication from their chief executive or senior management.

Gerwyn Davies, Public Policy Adviser at the Chartered Institute of Personnel and Development (CIPD) comments:

“While our greatest sympathy should be reserved for those who are losing their jobs during the recession, the effects on surviving employees should not be overlooked.  Individual workloads and stress levels look set to rise during the course of the year, placing a greater onus on managers and leaders to communicate regularly and check that workloads do not become unmanageable.  This is particularly important against the background of higher levels of job insecurity and lower pay awards.  It is pleasing to see so many employers upping their game on communications.  This could make all the difference in building the resilience to get organisations through the recession.”

Tim Payne, Head of HR at KPMG comments:

“It’s no surprise that organisations are reining back on non-essential spending and scrutinising their policies carefully. What is important is that policy changes are made sensitively and in a way which preserves goodwill.  Firms don’t want to alienate staff at a time when employee goodwill is a vital commodity.  Employees understand companies need to manage their costs – but they still expect leaders to communicate clearly with them when changes are made.”

Key findings:

· Almost half (48%) of employers surveyed say individual staff workloads have increased as a result of the credit crunch. A similar number (46%) say employee stress levels have increased. In general, employers see little impact from the credit crunch on issues such as absenteeism, staff engagement or productivity.

· Private sector employers, understandably, are more likely to have felt the impact of the credit crunch at least to some extent on their job security than public or voluntary sector workers (65%, 54% and 48% respectively).

· 38% of UK employers have reduced business travel. Over two-thirds (69%) of organisations that have reduced business travel spend have reduced travel expenses, while three-fifths (60%) have reduced international travel. Other reductions have also been seen in the use of private transport, for example taxis (mentioned by 64%) and in the use of first class travel (65% have decreased).

· When broken down, over three-fifths (68%) of private sector employees say they have decreased the use of first class travel, compared with 54% in the public sector and 40% in the voluntary sector. Two-thirds (66%) of private sector employees have cut international travel, compared with 38% in the public sector and 25% in the voluntary sector.  Three-quarters (74%) have reduced travel expenses, compared with 50% in both the public and voluntary sectors.

· 62% have increased their use of tele/videoconferencing and 43% have increased their use of public transport. Over half (55%) have reduced client entertaining.

· Twenty per cent of employers have reduced or cut the availability of free drinks or biscuits at meetings

(source: http://www.onrec.com/newsstories/24008.asp)

Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit http://www.pinnacleproactive.com

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