In addition, despite widespread and ongoing cutbacks, shortages of staff with skills in key areas are surprisingly commonplace.
The State of HR: From Recession to Recovery, a survey of senior HR professionals by City law firm Speechly Bircham and King's College London HRM Learning Board, found workplace stress and grievances, brought on by issues with pay, bullying and harassment and relations with management, are expected to accelerate in the coming year.
Staff turnover is predicted to rise in the next few months as employees, dissatisfied with frozen pay and adverse conditions, are expected to ‘vote with their feet', creating a more active job market.
Organisations surveyed showed signs of cautious optimism with regards to workforce growth, with 44% of respondents saying they expect some increase in workforce size in the forthcoming year. There are signs that employers could be returning to graduate recruitment with 19% expecting at least some increase in 2010 (compared with only 7% reporting increases for 2009).
Just under a third (29%) of respondents identified that grievances lodged had gone up in 2009, and 23% anticipate future increases in grievances (owing to a rise in stress and employment-related problems) in the coming year. The biggest causes of grievances have been bullying and harassment, and relations with senior or line managers. Grievances around pay and conditions, workload, career development, and stress are anticipated to become more important in 2010. A third of those surveyed also predicted an increase in staff turnover.
The top three major HR challenges reported for 2010 are maintaining employee engagement (cited by 68% of respondents, up on 58% in last year's survey), followed by succession planning (cited by 53%). This, together with the challenge of talent management (cited by 42%) shows the extent to which employers anticipate having to focus on managing high performers to ensure key talent is retained and organisational performance maximised.
The survey found there is a striking sense of uncertainty regarding workforce requirements, with 85% of respondents indicating uncertainty about the size of workforce required over the coming two years and 72% indicating uncertainty about the skills that will be required.
Despite the recession and widespread cutbacks, a surprising 22% of organisations reported experiencing a shortage of staff with key skills (predominantly in professional, managerial or technical areas).
HR professionals surveyed reported a significant increase in the use of flexible work arrangements: 38% say that there has been an increase in their use over the past year and 37% say they expect this to go up again in 2010. Less than 50% of the companies that had made redundancies in the past year had used compulsory redundancy, a significant reduction from the previous survey. The survey also found that employee engagement had declined more rapidly in organisations that had made compulsory redundancies.
And 36% of respondents to the survey reported using absence records as part of the criteria for making redundancy decisions over the past year, while 42% used disciplinary records and 46% used a general performance assessment. 22% used length of service - despite the potential age discrimination implications.
Commenting on the findings, Richard Martin, employment partner at Speechly Bircham, said: "At a high level our survey shows the majority of employers are expecting a gradual move towards calmer economic waters where the onus is less on cost saving and more on re-engaging with staff and looking to repair the damage caused by the turbulence of the recession. It is not a consistent story, however, and some sectors, notably the public and third sectors, have still to feel the worst effects of the recession."
"The survey records a huge increase in the use of flexible and part time-working. This appears to be born out of a desire to cut cost without the need for compulsory redundancies and that chimes with the recent jobless figures and anecdotal evidence elsewhere in the economy."
"The job market has been largely static for some time with staff turnover low by historic standards. Pressure is building and there are indicators throughout the survey findings that 2010 may see a huge release in pent-up discontent and a surge in employees looking to move on."
"Unfortunately the overall underlying message that emerges is that the next year is going to bring even more challenges for HR. Engagement, talent management and succession planning may be their top three priorities for the coming year but the biggest proportion of their time may instead need to be spent dealing with the consequences of a lack of engagement: grievances and a big increase in staff turnover."
Stuart Woollard, managing director of King's HRM Learning Board and co-author of the survey report, added: "Management is increasingly seeking the elusive Holy Grail that is employee engagement. During this recession this has continued to go up the CEO agenda as real engagement is vital for employers to help retain the motivation and commitment of key employees and move their organisations towards recovery. Our survey shows that for those employers who can drive engagement there is an association with increases in performance."
