Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header
Share for a Cause









Alternatives to redundancies have benefits

Written by: Chris Watson

Article Overview: The overall cost with redundancies is far more than just the initial redundancy pay an employee receives. You will need to add costs for the recruitment when you require staff again and the cost of training new recruits to have them reach the development stage your redundant staff were at prior to being made redundant. How do you place a cost on this? Then there are the negatives that come from any business making redundancies which includes low morale within the workforce which inevitably reduces production, performance and service. Good quality staff can leave for alternative employment due to the uncertainty which may happen after you have reduced to the number of staff you felt appropriate as they have been offered employment from interviews taken during the redundancy process. What is the cost of this?

Free Download - A Must Before You Recruit By Chris Watson
Name: Email:

Alternatives to redundancies have benefits

The overall cost with redundancies is far more than just the initial redundancy pay an employee receives. You will need to add costs for the recruitment when you require staff again and the cost of training new recruits to have them reach the development stage your redundant staff were at prior to being made redundant. How do you place a cost on this?

Then there are the negatives that come from any business making redundancies which includes low morale within the workforce which inevitably reduces production, performance and service. Good quality staff can leave for alternative employment due to the uncertainty which may happen after you have reduced to the number of staff you felt appropriate as they have been offered employment from interviews taken during the redundancy process. What is the cost of this?

Two alternatives to redundancy that can reduce all the associated costs that go with it are:

Salary reductions
By way of consultation and agreement you and your employees may find reducing existing salaries for an agreed period of time a more beneficial solution to a short or medium term problem. If for example you need a reduction in employment costs of £100,000 per annum and you have 50 employees that equates to £2,000 per annum each on average. Your employees may feel much more comfortable with this solution.

Reducing hours
Again through consultation and with agreement reducing hours per week could also be a better solution than redundancy for all parties. It would also steer you as an employer away from all the associated costs that go with redundancy. If we take the same 50 employee example with an average hourly rate of £10 and a working week of 37.5 hours, then reduce it by 7.5 hours per week or £75 per week per employee the saving over the same one year period equates to £195,000.

Both alternatives also give a saving in employers NI in addition to the amounts given in the eaxmples.

It would appear that in the current downturn and so much news of redundancies employers are not carefully reviewing all their options to deal with the situation.

Ask yourself this, when the market changes and an upturn begins which employers will be best suited to making the most from the situation, those who made redundancies and then have to start recruiting or those who thought out alternatives and are in a position to capitalise?

Think long and hard before you make redundancy your only option!

Related Articles
  The HR Headache of Making People Redundant
  Scarcity And The Next Best Alternative
  Alternatives to Redundancy Reviewing the Options
  Improving Morale After Redundancies
  Support for Businesses and Their Staff in Times of Redundancy

Home > Human-Resources > Chris Watson > Alternatives to redundancies have benefits
Article Tags: beneficial solution, better solution, consultation, development stage, downturn, employment costs, hourly rate, low morale, new recruits, period of time, production performance, quality staff, recruitment, redundancies, redundancy, salaries, salary reductions, uncertainty, workforce

About the Author: Chris Watson
RSS for Chris's articles - Visit Chris's website

Chris spent over 20 years in the Retail Automotive Industry latterly holding positions as Operations Director, Divisional Director and Managing Director before forming two of his own companies from 2006.

Connect HR & Recruitment Ltd was established in 2007 of which Chris is a Director and Partner, a business that offers support and advice to SME's on Recruitment, Human Resources and Health & Safety. CARS (Connect Automotive Recruitment Services) is a trading arm of Connect HR & Recruitment which specialises in the Automotive recruitment sector offering Executive Search and Selection plus Managed Advertising services of which Chris is a senior Recruitment Consultant. CARS has access to over 100,000 experienced Automotive candidates residing in the UK.

In September 2009 Chris was elected as Fellow of "The Institute of The Motor Industry" and in January 2005 he was awarded a Diploma in Performance Coaching by the NCFE. Chris also holds a certificate for Managing Conflict in the Workplace awarded by the Institute of Leadership and Management (ILM) in 2011 and a certificate in employment and consumer law.

Chris has written and developed a one day training course "Successful Recruitment" as well as presenting and writing on the subject of recruitment within the Automotive Sector. Find out more about CARS at www.carrecruitment.com



Click here to visit Chris's website
Dashed Line

More from Chris Watson
TIME FOR BUDGETS BUT NO TIME FOR PERFORMANCE MANAGEMENT
A Must Before You Recruit
Reviewing Your CV
Alternatives to redundancies have benefits
Will The 48 Hour Opt Out Rule Remain In The UK


Related Forum Posts
Make Yourself Attractive Make Yourself Attractive - I've found that its much easier to find joint venture partners when you make yourself an attractive JV partner. What benefits are there for the people that you want to partner with? This list of benefits should grow and become stronger over time. Shri
Re: Best incentive to offer employees Re: Best incentive to offer employees - [quote="Evan":31y2csyt]What's the best incentive to offer employees? Is it more health benefits? More vacation? Health club memberships? Paying for training? Cash / non-cash bonuses & rewards? I'm preparing a new package for my company and would love to get your thoughts! Thank you in advance![/quote:31y2csyt] A tough part of this is that different people have different needs. I used to work at a local hospital and we had great benefits, but there were a number of things I just never used. Is it possible to offer several different options? I'm thinking kind of like a cafeteria style insurance plan where you pick the benefits that you need. The initial planning would be a pain, but that way the employees would each be able to chose the benefits that fill their personal and/or family needs. You could also make a list of the sort of things you are thinking about and send out a survey to get thoughts from your people. See what they need and would respond to. Shri
Equipment leasing Equipment leasing - Equipment leasing has many benefits, such as tax benefits, conserving money and always having up to date equipment to stay competative to name a few. Obviously, it's partially dependent upon what type of business you have as to whether you will benefit more than someone else but... Do you think it's worth leasing your equipment rather than purchasing it? Can you think of any other reasons you can benefit from it or any reasons this is not a good idea?
Re: Use of Merchant Cash Advances on the Rise Re: Use of Merchant Cash Advances on the Rise - I agree that it really rises and as per the notification it goes up for benefits.
Obama Wants Social Security for Illegals Obama Wants Social Security for Illegals - This monring I got a mail from the newswatch magazine I subscribed for that: Obama Wants Social Security for Illegals! Millions of illegal aliens in the U.S. Barack Obama’s plan gives a driver’s license to any illegal who wants one. But that’s not all. Obama’s plan gives illegals social security benefits and raises taxes for his health care plan to cover them. Who pays? You do. Driver’s licenses and government benefits for illegals. Higher taxes for us. That’s Obama’s plan. Obama. Too radical. Too risky. The National Republican Trust PAC is responsible for the content of this advertisment. In think this is a political propaganda, in order to discredit the candidancy of Obama. Or will it be true? What impact do you think will have on entrepreneurs in america?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.



Featured Article


Bottom Footer
Share for a Cause












Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

Avoid Burnout: Do the Limbo Regularly

Leading from Authenticity is a Beautiful Thing

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.