Since Margaret Thatcher’s Government  introduced legislation that made striking difficult and secondary striking illegal unions have found it difficult to flex their muscles in the same way as they used to.

However, with a financial downturn will the tide begin to change and if so how will that affect business in general?

That will probably depend upon what happens to inflation. The cost of many raw materials for production such as copper, fertilizer and oil have doubled in the last few months. Already at its highest for ten years inflation is likely to rise even higher.

The result is that there will be demands for increased salaries in order to keep up. Petrol tanker drivers are possibly the first in a series of high profile wage demands that will include teachers, health staff, civil servants and refuse collectors that will run through the coming autumn and winter.

To counter rising prices firms, including SME’s, will feel that a mix of strategies including increasing product charges, reduction in quantity delivery and reducing costs such as advertising. In the end, however, it could result in savings that will result in “regretted layoffs”.

However, care needs to be taken with laying off employees because once gone the same skills may be very difficult to re-employ when times inevitably get better.

The reason is the demographics of the working population. Sourcing managerial and technical talent is seen as being the most important challenge for countries such as UK, USA, Japan and Australia. Yet the working population is getting older and many of those “Let go” will be older employees that may retire or choose to retire before the economic situation improves.

Coupled with the fact that booming economies such as China are recruiting managerial and technical talent as fast as it can (It’s cheaper for China to recruit one expert-expat to work in China than to send 20 of their students to study abroad) this could well mean that much of the top talent currently available will have disappeared in the future.

For over a decade employers in the UK have become used to the fact that employees have a great deal of choice in the job market. Talent could leave to jobs with more money and benefits and in the USA and the Far East.

To fight this trend employers in the EU have been encouraged to “engage with their staff”, provide training and development opportunities and ensure that their talent is at all times happy and well managed. This trend has been encouraged by the UK Government as well as EU legislation providing employees with redress for any unfair treatment. In fact for ten years “niceness” has been in vogue.

However, has the tide begun to change? With the financial downturn employers would expect to see employees become less demanding so as to protect their jobs.

That will probably depend upon what happens to inflation. Already at its highest for ten years and predicted to increase to above 4%, employees are likely to expect increases in salary in order to keep up. Petrol tanker drivers are possibly the first in a series of high profile wage demands that will run through the coming autumn and winter.

Employers will feel constrained by increasing costs and an inability to increase their product prices and cost savings will result in “regretted layoffs”. The time to know that a recession is upon us is when the daily news bulletins begin to report redundancy figures as happened in the 1980s.

The trick for forward thinking businesses will be to identify those employees that are essential to survive the downturn, identify the skills that are needed and to develop a strong team that can ride out the storm.