Manufacturers taking action to avoid redundancies

New data from the Chartered Institute of Personnel Development (CIPD) and KPMG reveals the alternatives employers are pursuing to avoid having to make redundancies in the first quarter of 2009. The data, based on early findings from next month’s quarterly CIPD/KPMG Labour Market Outlook and released as part of the CIPD’s ‘RedundancyWatch’, finds 50% of employers saying they have introduced recruitment freezes to offset the need to make redundancies, while 44% are terminating temporary or agency worker contracts to prevent the shedding of in-house staff and one in seven (15%) have introduced short-term working. Other measures employers say they are taking include more use of flexible working measures (19%), cutting bonuses (17%) and wage cuts (7%). Such measures are being adopted most by sectors most affected by the current downturn, such as manufacturing. 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, what often goes unnoticed beneath the media headlines is the extent to which employers are introducing alternatives to avoid or minimise the number of redundancies they make. Measures such as recruitment freezes, shedding temporary workers and short-term working are clearly not without pain, but they can often be preferable to redundancies. “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. These findings highlight the lengths to which managers are going to minimise the impact of the recession on their organisations and employees.” CIPD Chief Economist Dr John Philpott (pictured) added: “While the report offers some comfort to people on permanent contracts who fear being made redundant the news is less good for agency temps, contract staff and those, including graduates, seeking to be recruited into jobs. Whichever way we look at it, demand for labour is plummeting, as today’s official unemployment statistics will confirm.”