Employers take steps to avoid Redundancies
Businesses are avoiding redundancies by putting a hold on recruitment and cutting back on agency workers, according to the Chartered Institute of Personnel and Development (CIPD).
A survey of nearly 900 businesses, carried out by the CIPD and accountancy firm KPMG, revealed that 50% have brought in a recruitment freeze, while 44% have terminated temporary or agency workers contracts to prevent making cutbacks to in–house staff. CIPD public policy adviser, Gerwyn Davies said:
“Measures such as recruitment freezes, shedding temporary workers and introducing short–term working are clearly not without pain, but they can often be preferable to redundancies”
“There can be a high cost to making staff redundant, as letting skilled staff go can risk low morale among those left behind, as well as long–term damage to the future prospects of the business. However, these findings highlight that there are alternatives which can help minimise the impact of the downturn on the organisation.” he said.
The research also revealed that almost a fifth of businesses have increased their flexible–working practices and one in seven have introduced short–term working — where staff are asked to work shorter hours each week or take unpaid leave for a fixed amount of time.
According to Davies, for businesses with no option but to make redundancies, good internal communication is vital.
“Firms have to show it’s a decision they haven’t taken lightly. Failure to show empathy with staff or properly explain why redundancies are happening is likely to spark rumours, and could result in poor morale and a negative image for the company.” he added
A spokesman for the Federation of Small Businesses added:
“More than a third of our members are having to reduce employee hours and future hiring to combat the credit crunch.”
“However, there are other avenues for firms to bolster their business and avoid redundancies — for example, by diversifying their services. They could also save money by being more energy efficient, moving to a smaller office or seeking new, more affordable suppliers and finance.”
You can read more about Redundancy in our employment index.