In June, George Osborne announced a two year public sector freeze on pay for those employees earning in excess of £21,000 but this will have a detrimental effect according to research carried out by the Institute of Payroll Professionals.
64% of the Institute’s members believe the freeze on pay will encourage public sector employees and umbrella company contractors to look for private sector roles and almost half of the respondents think it will adversely affect recruitment for vital roles.
The overall consensus is that the pay freeze will have a negative impact in terms of employee engagement as well as the sector’s ability to attract and retain high calibre employees.
Things in the public sector really aren’t looking rosy at the moment with tens of thousands of job losses looming. There are serious concerns that the private sector umbrella companies will not be able to create enough jobs to counterbalance these redundancies if the cuts are made to quickly, according to the IES.
This warning comes ahead of the October spending review, which could lead to even more public sector job losses. A research fellow at the Institute, Dr Paul Sisson, said that many public sector workers will be facing redundancy and unable to find a job in the private sector.
It’s not only redundancies from the public sector that will be pushing up the unemployment figures either. The CIPD has claimed that around 33% of private sector businesses plan to reduce the size of their workforce in the coming three months.
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Image: Relax and watch the lake freeze over by kuddlyteddybear2004
