Budget cuts kick in according to survey

A recent industry survey shows that two-thirds of UK employers experienced budget cuts in 2008. 

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 have reduced their travel expenses, compared with half 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 per cent) have increased their use of tele/videoconferencing while 43 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) said: “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.”

Tim Payne, head of HR at KPMG said: “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 that 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 of the survey are as follows:

•      Almost half (48 per cent) of employers surveyed say individual staff workloads have increased as a result of the credit crunch. A similar number (46 per cent) 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 per cent, 54 per cent and 48 per cent respectively).

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

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

•      Sixty-two per cent have increased their use of tele/videoconferencing and 43 per cent have increased their use of public transport. Over half (55 per cent) have reduced client entertaining.

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

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