But contractors are still more gloomy than the rest of industry where only 7% of firms have stopped hiring staff compared to a high of 61% in Spring 2009.

The figures are revealed in a survey by the CBI and recruitment specialist Harvey Nash which shows employers are gearing up for the recovery by targeting recruitment in areas that will maximise growth.

Firms are taking a cautious approach to hiring in the year ahead. A quarter (23%) are planning targeted recruitment in areas including management, technical and sales, while a fifth (21%) plan to add staff in some parts of the business and reduce numbers elsewhere.

Pay freezes have also thawed, falling from a peak of 55% of employers last Spring to 14%. But pay restraint remains the norm as firms try to control costs.

A fifth (22%) are planning targeted pay rises for key staff, while 42% are planning a below-inflation award for all employees. One in ten employers is planning an award in line with or above inflation, based on the Retail Prices Index

John Cridland, CBI Deputy Director-General, said: “During the recession, private sector employees adopted a can-do attitude, accepting that measures such as pay and recruitment freezes were the alternative to companies going under, and further job losses.

“Sustaining that spirit of co-operation will be more challenging now the immediate threat appears to have passed.

“Firms are cautious about recruitment and pay, given the fragility of the economy. But they know they can’t afford to take staff for granted, and must redouble efforts to keep employees on board as they gear up for growth.”