Falling standards of living and concerns over job security are undermining workplace morale, according to the latest CIPD quarterly Employee Outlook survey.

The research found that employee confidence and trust in senior leaders has dropped to a record low of -31 from -23 for the previous quarter, while the net trust score has also fallen to -8 from -1 over the same period. These figures are calculated by subtracting the percentage of employees satisfied from the percentage dissatisfied.

Although job insecurity has edged up since the previous quarter, with 21% of employees thinking it likely they could lose their jobs as a result of the downturn compared to 20% last quarter, there is a big difference between the sectors. Almost one in three (30%) public sector employees say it is likely they could lose their job compared to 19% of those in the private sector and 27% in the voluntary sector. In all, 21% of respondents say their organisation is planning to make redundancies, rising to 58% among public sector respondents.

The survey finds the proportion of employees saying their standard of living has worsened in the last six months has increased to 37% from 31% in the previous quarter. Public sector employees are most likely to say their standard of living has worsened (47%) compared with 35% of workers in both the private and voluntary sectors.

Claire McCartney, CIPD Resourcing and Talent Adviser, commented:

“The survey findings highlight the importance of senior leaders in organisations putting even more emphasis during tough times on how they communicate, consult and involve staff where major changes such as restructuring or redundancies are being proposed.

“Evidence suggests that where employees benefit from effective communication and feel their views matter, and are taken into account before decisions are made, they are more likely to remain engaged in their work and committed to the organisation.

“The survey underlines the importance of the Employee Engagement Taskforce launched by David Cameron last month to support and encourage organisations in building the leadership and management capability needed to boost morale and increase the number of high performance workplaces.”