Blaser Mills
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Alternatives to Redundancy?

Some different approaches worth considering

Although job losses continue to dominate the headlines, the last thing a business may want to do is to make redundancies, effectively throwing away the substantial investment it will have made, both in terms of cash and time, in developing the skills and experience of its workforce.

There are plenty of alternatives to redundancy which can both save you money and ensure you retain your best staff through difficult times.

These include:

  • Recruitment freeze - in order to avoid endangering existing jobs.
  • Pay freezes or cuts - would employees be prepared to settle for job security rather than a pay rise?
  • Pay deferral schemes - allowing a temporary deferral in pay, to be given back to employees at a later date.
  • Removal of overtime - where there is a reduction in demand, a corresponding reduction in overtime can be a straightforward way of cutting costs.
  • Reduce use of agency workers - relying on core staff and cutting freelance cover is an option, especially in times of reduced demand.
  • Introducing short-term or flexible working, as well as job sharing schemes.
  • Cutting bonus, commission and pension payments.
  • Offering unpaid or reduced pay sabbaticals
  • Redeploying staff from quieter areas of the business or seconding them to other companies can help keep staff motivated and save on recruitment costs.

Research conducted recently by the Chartered Institute of Personnel and Development and KPMG, shows that many companies are adopting these measures to avoid having to make redundancies. Half the companies polled said they had introduced recruitment freezes as an alternative to redundancy, 44% had terminated agency or temporary worker contracts instead of cutting in-house staff, while 15% had introduced short-term working. Further measures included making greater use of flexible working (19%), cutting bonuses (17%) and wage reductions (7%).