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The private sector jobs recovery is continuing, but firms are increasingly taking a cautious approach to pay as they look to stay competitive. That is according to a survey by the CBI and recruitment specialists Harvey Nash. The Spring CBI/Harvey Nash Employment Trends Survey covered 319 companies, employing around two million people in the UK. The survey found that pay restraint remains the norm, with nearly half of all firms planning a below-inflation pay award or targeted pay rises, and one-fifth planning a pay freeze in order to remain competitive. CBI director-general, John Cridland, said: “Businesses have been creating jobs where they can during the past few months, and it looks as though that steady trend of employment growth in the private sector is set to continue. “But hiring plans are cautious, and pay awards in particular remain low as businesses look to make sure they stay competitive in tumultuous times. We have to accept this constraint as the new normal; we will only be able to afford to pay ourselves more in the long-term by improving productivity and competing more effectively around the world.” On the outlook for recruitment, the survey shows that jobs are being created across the private sector. While 30% of employers predict their workforces will be larger in a year, 18% predict they will be smaller, giving a balance of +12%. On employment regulation, the survey shows that two-thirds (67%) of firms perceive it to be the biggest threat to labour market competitiveness. Nearly half of firms have been affected by the introduction of the Agency Workers Directive in October 2011, and of these, nearly six in 10 firms have reduced their use of agency workers, preferring to employ temporary workers on fixed-term contracts or to use other temp models. Meanwhile, the employment tribunal system is the single biggest deterrent to firms looking to hire, with a 58% increase in claims over the past five years. Other Business Money News
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