Public sector picking up some of the jobs slack

Employment in the private sector is showing modest signs of picking up, but prospects for higher wages remain muted.

Almost a third - 29 per cent - of all public and private sector employers plan to hire more staff in the coming six months.

CBI director-general John Cridland said the results showed that the private sector was compensating for job losses in the public arena, where government austerity measures are taking effect.

Demand is particularly high for professional and highly-skilled staff, with manufacturing and smartphone software application development notable hotspots.

However, the survey, by recruitment specialist Harvey Nash for the CBI, also found that pay freezes were on the rise.

The proportion of pay freezes in the private sector remained unchanged at 16 per cent, while, in contrast, 83 per cent of public sector organisations have frozen wages.

Only a quarter of employers said they could afford cost of living increases in line with or ahead of the Retail Price Index, which currently pegs annual inflation at 5.2 per cent.

Nearly a third are planning a general increase at less than RPI, while 17 per cent say increases will be targeted towards essential staff only.

Across the economy as a whole, 26 per cent of employers expect no change to current staffing levels during the coming six months.

"While the public sector is reining in recruitment plans, private sector employment is growing slowly but steadily," said Albert Ellis, chief executive of Harvey Nash.

"People with higher level skills, professional, technical and sales experience are most in demand, as these are critical roles for firms seeking to capitalise on growth opportunities."