North East firms hold on to talent

Apr 1 2009 By Sue Scott

NEW data shows North East firms have learned their lesson from the last recession and are keeping a tight hold of vital skills by re-deploying staff rather than lose them.

The 2009 National Management Salary Survey out today showed the North East had the highest "internal transfer" rate in the country. The figure of 16.7% was more than treble last year’s 4.3% and considerably higher than the 1.6% during the last major recession in 1991.

Published by the Chartered Management Institute and salary survey specialists CELRE, it also showed firms were sweetening the pot for employees by awarding more holidays and lieu time and offering training as salary increases slowed.

Average executive take home pay in the region rose by only 3.7% to £34,377 - the lowest increase for five years and well below the national average of £39,770.

Jo Hand of Middlesbrough-based Jo Hand Recruitment - who is herself giving staff a morale-boosting extra three days off this year - said workers were also protecting themselves by learning additional skills.

She added companies were looking to re-deploy staff in direct "money-making" roles rather than let them go.

"Employees are being redirected to areas where they can add more value to the business - such as credit control and sales," she said.

Zanna Bewick, who runs Newton Aycliffe HR consultancy firm Elphaba Business Solutions said she was surprised at the high deployment rate.

"Perhaps directors are retaining skills within the business because they are finding it difficult to find the right skills outside."

She said she was witnessing an excess of job-hunters over vacancies.

Jobcentre Plus - which deals with around one third of total job advertisement - said there were 20,110 people looking for work in February across Stockton, Hartlepool, Middlesbrough and Redcar and Cleveland, but just 5,230 available jobs, or nearly four people for every vacancy.

Alan Lisle, director of recruitment firm New Group - a supplier of staff to Teesport - said bosses were less inclined to make redundancies than in the early 1990s.

Instead, bosses were trying to extract more value from staff by training them in more than one role.

Although some local firms have had to axe jobs, others are introducing short-time working and temporary cuts in production and pay.

Corus Teesside Cast Products (TCP), which employs around 2,000 staff locally, has cut production from its blast furnace by 30% to protect local jobs.

Last month bosses at the site said they expected reduced production to continue for a further three months.

The Chartered Management Institute said local employers were using internal restructuring as an opportunity to transfer core skills across their business.

It said 8% of senior function heads had been transferred over the past 12 months, compared with only 2% being made redundant.

Long-term retention of junior staff was particularly important, with 16.9% offered transfers and just 1% facing redundancy.