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Construction industry growth slows

Activity in the UK’s construction industry grew at its slowest rate for three months in May, as new orders dwindled and optimism weakened.

The Markit/CIPS Construction Purchasing Managers’ Index (PMI) fell to 54.4 from 55.8 in April, staying above the 50 level which separates growth from contraction and beating forecasts f or a fall to 54.2. However, the reading was still the lowest in three months.

Many firms blamed lower economic confidence for the drop in demand for new business. Around a third of respondents thought their output would increase in the next 12 months, while almost a fifth expected a reduction. The resulting balance signalled that the degree of positive sentiment about future business fell to its weakest since October 2011.

Tim Moore, senior economist at Markit, which compiles the survey explained; “While still in positive territory, the month-on-month fall in business confidence was the greatest since June 2010, which was when plans for the autumn government spending review were first announced.

“This reassessment of the year-ahead outlook represents worries within the construction sector that weakening economic conditions could leave firms running on empty again once existing projects have come to completion.”

Last week the PMI for Services revealed a slump in the manufacturing sector too. The report revealed the biggest drop in three years with the sector dropping well below the 50 level to 45.9.

Managers are confident about growth despite economic uncertainty

It seems fears surrounding the news of a double-dip recession were short-lived, as a multitude of surveys reveal strong business and growth confidence.

60% of bosses are confident that their business will grow its output next year and almost a fifth expect it to grown significantly – according to research by the Institute of Leadership and Management (ILM).

The survey of 1000 managers showed that 85% felt growth was a priority for their company and 8 out of 10 said they were confident about their ability to lead growth.

Supporting the survey, the UK business Confidence Monitor (BCM) found that confidence, surprising, improved in the three months to May, despite uninspiring employment and GDP figures.

The BCM index (from chartered accountants ICAEW and consultants Grant Thornton) was 12 at the beginning of the month, up from -9.3 in the last quarter and the highest level since the second quarter of 2011. The organisation believes that the increase implies economic growth of 0.6% in the second quarter of the year.

“Turnover and profits are all increasing but nowhere near the rate seen pre-recession and businesses are beginning to realise that this environment may be the norm for some time,” said Grant Thornton chief executive Scott Barnes.

The news is great for the temporary agency labour market, which has seen some recent fluctuations too. As companies continue to increase production and activity, temporary agency staff are employed as a prudent way to increase workforce levels whilst remaining flexible.

UK top of Spanish workers relocation list

With unemployment in the country rising rapidly, a recent survey has found that 69% of the Spanish workforce is willing to relocate to find jobs.

This week, joblessness in the country hit a record high of 5.64 million, putting the rate of unemployment at just below a quarter (24.4%)

Half (52%) of those surveyed would prefer to relocate within Spin, to larger cities where employment prospects are more positive – such as Madrid or Barcelona. However, 20% of those surveyed would move to other parts of Europe for work. Perhaps unsurprisingly, top of the list of preferred destinations was Germany and the UK.

Other results showed that 3% would choose to move to countries outside the EU and 4% would consider moving to Latin America or a similar destination with an emerging market.

The desperate state of the jobs market in the country is exposed by the fact that a fifth of people surveyed said moving abroad poses no problems, provided they have secured work.

Find out more about contingent workforces in the country in our blog post Spain and temporary agency workers.

Employers struggle to close the pay gap.

Despite a drop in inflation, employers are still finding it difficult to close the gap between basic slurry and the cost of living.

Last week it was announced that inflation dropped to 3% in April, the lowest for more than two years, however a survey by the CIPD found that 51% of companies are unable to predict whether salaries will even rise over the next 12 months, let alone increase in line with inflation.

The Labour Market Outlook showed pay award expectations over the last three months have fallen from 1.7% to 1.5% – just half the current level of inflation.

Perhaps surprisingly, it is private sector firms which are least certain about their ability to give pay increases over the next year. 21% of employers surveyed have already decided to postpone pay decisions until next year.

Among those companies that have been able to forecast a pay rise, the average award is below inflation at 2.6% and the main causes for the expected increase are affordability (62%), inflation (55%) and employee productivity and performance (52%).

Charles Cotton, rewards advisor at the CIPD, comments: “Our data shows that many employers are keen to raise pay in line with inflation but are struggling to close the gap as inflation remains stubbornly high. Line managers and HR professionals need to look at how they can continue to keep employees engaged and performing well in the absence of substantial pay rises, while at the same time limiting the impact of financial distress on employees by offering financial education, debt counselling and voluntary benefits packages.”

Olympic boost for temp positions

With the London 2012 Olympics now just two months away, there are expectations of a huge rise in the use of temporary agency workers. Whilst they are commonplace in businesses that naturally have peak periods, such as retail and tourism, the games will mean companies unused to contingent workforces will be reliant on them to meet demand.

Businesses planning to use temporary agency workers to cope with a rise in demand during the Olympics must make sure they fully understand the Agency Workers Regulations.

The duration of the games means many workers will only be employed for a few weeks, much less than the 12-week qualifying period. But, the regulations have an impact before the qualifying period expires. Whilst many larger employers who use temporary agency workers year-round will already have the processes in place to deal with the regulations, those anticipating a high demand purely during the Olympics may fall foul.

Under the regulations there are ‘Day One Rights’, which, unsurprisingly, a temporary agency worker is entitled to from their very first day. These include access to shared facilities and amenities or services, such as crèches, canteens and transport services, and information on job vacancies.

For further information on the rules, please see our Agency Workers Regulations website.

Unite cracks down on employers using agency workers

Unite has voiced concerns over the “widespread use of agency labour” in the mechanical and electrical sectors.

This week the union launched its national campaign, “Play by the rules” aimed at policing key agreements on every site in the UK. In a press release the union said it is concerned that “employers are increasingly cherry picking the parts of the agreements that suit them while ignoring the rules that don’t, resulting in workers not receiving the correct rates of pay and other terms and conditions as well as the widespread use of agency labour.”

Unites agreement states that employers should make every effort to offer directly employed work, however there are increasing levels of temporary agency workers in the sector.

This is not unique to these sectors, and whilst some employers may use so-called ‘casual’ workers to flout laws and avoid higher pay-rates, the majority use temporary agency workers due to their flexibility and skills. Whilst Unite doesn’t want to remove all temps from the industry, caution should be taken, especially whilst the economy is still so volatile.

Underemployment and its impact on workforce politics

Underemployed (adjective) 1.employed at a job that does not fully use one’s skills or abilities.
2. employed only part-time when one is available for full-time work.
3. not utilized fully.

The unemployment rate dropped in the last three months, but figures show that the rise in part-time and temporaryworkers has been significant. There are now 1.4million people ‘underemployed’ in the UK; that is that they are working, but not in a role which is insufficient in some way to the workers, for example pay, hours or skill-level.

Whilst some work is obviously better than no work, the strain underemployment puts on workers and their families is pronounced. The phenomenon is gripping across the market too – whereas many would expect women to be part-time workers, the latest figures show that 645,000 men are now working part-time. Many people are finding the need to work multiple jobs to make ends meet, not only is this a risk to their health, but it’s also a concern to employers as productivity levels are likely to drop.

The impact on workforce moral and politics is, unfortunately, a hugely detrimental one. Although employees are choosing to work on a part-time or temporary basis over relying on Job Seekers Allowance, there is still likely to be a level of resent, especially toward those who are employed on a full-time basis or in desirable positions. HR Managers have an increasingly difficult job to maintain moral in an underemployed workforce, at the same time recognising underemployed talent that could benefit the business if better utilised.

According to the TUC, involuntary part-time work has risen quicker than unemployment since the start of the recession. During this period, the number of men in this position has risen by more than 115%. And nearly a third of young people in work are having to do part-time hours, even though they want a full-time job.

Employment rate rises slightly, but temp billings still falling

The usage of temporary agency workers is continuing to fall as employment levels rise slightly.

Figures from the REC and KMPG Report on Jobs shows a drop in temporary billings in April. Although the fall is only slight, the rate of contraction was the fastest in almost three years.

Experts had predicted the ONS unemployment figures would show no change in the jobless levels, however the rate fell by one percentage point to 8.2%. The number of people claiming Jobseekers Allowance also fell in April.

The number of people in work increased by 105,000 to almost 30 million, but this wasn’t due to people finding full-time work.

The data shows that nearly 8 million people are now in a part-time job, the highest since records began in 1992, while those working part-time because they cannot find full-time work increased by 73,000 to 1.4 million – a record high.

Although mixed, the figures are a welcome sign, especially after recent data showed the UK has slipped back into recession. Employment Minister Chris Grayling welcomed the figures, calling them a “welcome step in the right direction”.

Public sector temp usage falls sharply

Temporary employment in the public sector dropped significantly in the first quarter of the year.

Overall employment decreased by over 15%, but some areas of the UK have taken much bigger hits when compared to the same period last year. The North East saw the biggest drop at -127.3%, followed closely by the West Midlands at -115.9%, London saw a drop of over 25% in the use of temporary staff.

The figures from Comensura also showed a pay increase for temps, averaging at 8.9% across the board – this is likely due to the Agency Workers Regulations.

Young people have been the worst affected by the reduction in appointments as the number of 25-34 year-olds employed on a temporary basis dropped by -35.4% year on year.

Temporary agency labour usage dropped in driving and transportation roles by 39%, as well as IT roles and engineering/technical positions. Conversely, the construction industry saw a 20% increase in temporary staff usage.

Both men and women were affected by the reduction in temporary labour, although women did fare slightly better and now account for 45.3% of all public sector temporary labour. This was due to a lower than expected decline in the number of office/admin workers, a job category that accounts for almost 20% of all temporary workers and where women represent 70% of all temporary labour.