January 5, 2009
Guru has noted that the one organisation doing particularly well out of the recession is the CIPD.
The institute has been getting some fantastic media coverage over the past few weeks with its chief number cruncher, John Philpott, becoming almost Robert Peston like in his omnipotence.
Need a quote about how tough things are going to get? Want to know how many workers face the chop in 2009? Then speak to Philpott... Guru half expects him to be wearing a large black cloak and carrying a scythe such is the grim nature of his message.
While Guru was tucking into his roast turkey and all the trimmings, and attempting to consume his own bodyweight in chocolate, Philo has obviously been burning the midnight oil in an effort to solve the economic crisis.
And true to his role as HR's most influential beancounter, he has devised a formula which claims to help employers calculate 'the real cost of redundancy'.
(n × r) + (x × h) + (x × t) + ny (h + t) + wz (p - n)
When Guru first saw this it brought back bad memories of O Level maths lessons and the dreaded algebra. Guru now wishes he paid more attention to teacher rather than doodling offensive pictures on his exercise book.
The CIPD puts the average cost of making someone redundant at £16,375 - so if an employee earns at least £1 more than this then Guru feels it's an attractive option for the HR team.
No doubt we will be hearing more from Mr Philpott as the gloom deepens but his appearances on the BBC go through the roof.
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Comments (1)
If this doesn't put the final nail in the coffin of the CIPD's credibility I don't know what will. How can anyone really believe that quantifications like this are possible, let alone relevant. Even if it did cost this amount, average salaries are £26k per annum so the cost is recouped within 8 months and is a permanent saving thereafter. And, most importantly, a great many decisions to reduce headcount are based on improving cash flow without which a firm is dead in the water. If we were to take Philpott's philosophy literally we would be "mothballing" employees on full pay until the good times rolled around again! So, we face collapsing revenue and a static fixed cost: that's commercially realistic!
Our exalted HR leaders should leave esoteric number crunching to the real bean-counting profession and come up with some practical views on how firms can survive to live another day.
Posted by Kevin Bush | January 6, 2009 5:05 PM
Posted on January 6, 2009 17:05