There has been much speculation from politicians and economists alike about economic recovery, but obviously they are not the only ones concerned with how well the UK is rallying. Despite positive indicators showing economic improvement, there still seems to be an underlying fear amongst managers that the economy will once again falter having a devastating effect on business.
The announcement that the UK economy has grown by 0.8% in the first three months of 2014 and had already improved by 0.7% in the latter part of 2013, with figures indication a year-on-year growth rate of 3.1% (the fastest in six years), seems to have done little to allay these fears. CMI’s annual Future Forecast shows, despite the economic upturn, managers still worry about losing a significant proportion of their workforce, and fear for their own job security.
These underlying issues may also have an effect on the growth of the economy. If managers are pessimistic then this will directly affect business investment and growth. Needless to say, there is cause for concern, during 2013 there were wide scale reductions in staffing affecting all economic sectors of business, this equated to:
The worry is that reductions will also be necessary for 2014, revisiting the 2013 cutbacks. We are all aware of the reductions to public service spending, and the limitations government has placed upon local authorities as part of austerity measures. The fear of job losses is real for managers throughout economic sectors, with 65% of public sector, 23% of voluntary sector and 17% of private sector managers believing it is inevitable that their workforce will be cut in 2014. The concerns highlighted do not only affect managers, morale is continuing to be a problem for the workforce, due in part to the lack of job security and low wages.
Despite all of this, it should be noted that almost two-thirds of managers did feel optimistic about their organisations future during 2014, as compared to 53% in the previous year. However, for successful business growth, investment must be made in staffing, and 66% of managers still fear that they will not be able to recruit the calibre of staff with the skills and talent their organisations need as part of their business investment and growth process.
Overall, it would appear that some managers are being hindered by their pessimistic outlook of the UK’s continued economic recovery. They seem to be conflicted by thoughts of business growth versus worries of workforce job security, suggesting that fear could be affecting our businesses more than we would like.
We need to be mindful that for the economy to grow businesses need to be confident and invest, not only in physical resources, but in the workforce, including managers. This will help improve morale, and in the long term reduce the skills gap which is a growing concern, and managers are the conduit for this process, as long as they can overcome their fears.