It's great to see UK unemployment falling below two million (for the first time since 2008) in the latest Office for National Statistics (ONS) figures.
It's also great to see employees’ expectations about the future improving quite dramatically in Glassdoor’s Q3 2014 UK Employment Confidence Survey. The 10% fall in fear of redundancy is a big change from last quarter and would seem to be due, at least in part, to a reduced level of organisational belt tightening with employees reporting less restructuring, redundancies and hiring freezes.
Whilst it is disappointing that we have not yet seen advances in all of the indicators provided by the survey, the large jump in job security should mean that there are a lot of happier people about, and that businesses are set for improved financial performance.
We can therefore hope that job security is a lead indicator of further recovery in the job market and that we will see further gains in business outlook and job market optimism as well as increased salary expectations during the next quarter.
This is a critical change point for employers. Whilst employees have been afraid of losing their jobs, or even just been worried about their colleagues’ prospects (as we saw in Glassdoor’s survey for Q1 2013) it will have been much harder for them to really focus on their employers’ and customers’ requirements, rather than on what they themselves have needed from their jobs and careers.
With increasing confidence there is now a much greater opportunity to connect employees with the aims and aspirations of their employers. Organisations therefore need to find and create more opportunities to help their people engage, for example by involving them in business planning or work-based communities, or just by increasing opportunities to socialise with one another.
Leveraging increasing confidence will be an important means of lifting employee profitability - which as well as being an important business requirement will be vital in dealing with what is likely to be the next big change in the job market - expanding expectations of salary increases. (Whilst salary expectations are largely a result of firm success and salary payments, there is so much pent up demand for higher salaries at the moment, that expectations are likely to increase at a faster rate that companies’ ability to pay.)
Employers should therefore expect and prepare for rapidly increasing pressure on reward - particularly in those sectors and organisations where there has been little in the way of increases over the last seven years. The public sector is an obvious example and continuing austerity is likely to make this an increasingly challenging environment over the next few quarters and beyond.
Preparing for this new environment may require better identification of who is really important in an organisation, and in particular who will drive new growth opportunities, or maybe better and more agile succession planning.
However it is still early days and the economic recovery is still fragile so the gains in confidence seen during this quarter could still easily be reversed.
Companies will therefore benefit from continuing to communicate openly with their staff, helping employees commit time to new opportunities but also to be aware of risks and their potential consequences. Doing this could help businesses address any challenges they experience but should also avoid major surprises for employees if business confidence does reduce again, or if it simply continues to bump along, showing small shifts up and down, for a few more quarters to come.
By the way, I'm acting as Glassdoor UK's HR expert, helping to promote the findings of this research so look out for more comments from me in the press!
This was my report from Q2.
And did you know that consumers spend six times longer researching annual holidays than candidates spend researching potential employers (more Glassdoor UK research.)
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