Employers are considering alternatives to compulsory redundancies during the recession, according to the Chartered Institute of Personnel & Development and consulting giant KPMG.
The data is based on initial findings from the quarterly CIPD/KPMG Labour Market Outlook, due in February. It finds that a half of employers say they have introduced recruitment freezes to offset the need to make redundancies, while 44 per cent are terminating temporary or agency worker contracts. One in seven has introduced short-term working.
Other measures include more use of flexible working measures (just under 20 per cent), cutting bonuses (17 per cent) and wage cuts (7 per cent). These measures are being adopted mostly by sectors most affected by the current downturn, such as manufacturing and private sector services.
Gerwyn Davies, CIPD public policy adviser and the report’s author, said: ‘There is little doubt that private sector companies will continue to shed staff in great numbers this year and into 2010. However …there is a high cost to making people redundant, and letting skilled staff go can risk longer-term damage to the future prospects of the business.’
Members of the Human Capital Forum have found that employers with human capital measures are able to put a monetary cost on the recruitment of skilled people, and the cost of unfilled vacancies. Such costs are often hidden from view with conventional accountancy, and can be formidable if an employer has a huge hiring task as the economy comes out of recession.
Despite efforts to minimise redundancies, many companies have had to announce redundancies, with the UK economy losing around 40,000 jobs in the first two weeks of the new year. Balanced against that, the major supermarkets and some travel companies are continuing hiring, with announcements of around 20,000 new jobs, according to the BBC (news.bbc.co.uk, 13 January).