Latest industry figures have shown that staff redeployment in the engineering sector has increased by 10.1 per cent as employers look for alternatives to redundancy.
The 2009 National Management Salary Survey, conducted by the Chartered Management Institute and salary survey specialists, CELRE, revealed that employers are using internal structuring to transfer core skills throughout their business.
Compared with 2008’s internal transfer rate of 0.4 per cent, this year’s figures show an increase in retraining and motivating skilled staff in the wake of the ‘salary slowdown’.
According to the survey, 16.7 per cent of function heads have been transferred over the past 12 months compared with 4.2 per cent being made redundant. A similar trend was found with junior staff, with 18.3 per cent offered transfers and 3.5 per cent who faced redundancy.
However, the survey also revealed that the majority of employers are struggling to retain key staff. Around 47 per cent blamed the salaries they were able to offer, 46 per cent on job insecurity and the lack of career opportunities and 22 per cent on internal bureaucracy.
These problems have come as earnings for executives in the engineering sector reached their lowest level in five years, with the average executive now earning £38,361 per year.
Lord John Eatwell, chief economist at the CMI, said: ‘It is encouraging to see employers looking for ways to avoid redundancy rather than adding length to the dole queue without a second thought. It shows that business is growing up because today, unlike in 1991, there seems to be more determination to retain skilled staff.
‘Perhaps it is because employers are finally beginning to recognise that retaining competence is a far more cost-effective option than rebuilding a talented team from scratch. However, this is at a cost, and the longer the recession goes on the more likely it is that employers will be forced to lay off staff – creating the possibility of skill shortages in the recovery.’
Efforts to tackle retention problems have focused on employee benefits such as average annual holiday entitlement (up from 25 days to 28 days), training expenses and time off in lieu for extra work.
Mark Crail of CELRE said: ‘Employers are reacting quickly to the tough economic climate, with pay awards falling and many salary reviews this year resulting in pay freezes. Employers now need to move beyond pounds and pence to look at the other incentives they can offer within the overall remuneration package to motivate staff without breaking the bank.’