Companies predict more job cuts before year end

Nearly half of the organisations that carried out redundancies in the past
18 months plan to make further cuts this year, according to the CIPD’s
first-ever report on workplace attitudes towards redundancy.

The majority of organisations also report a decline in staff morale in the
aftermath of redundancies. The report, Best of a Bad Job, sets out the findings
of a recent survey of 563 organisations which have made at least one employee
redundant over the last 18 months.

In all, 45 per cent of firms polled believe they will have to make further
job cuts over this year. Nearly a fifth of redundancies were concentrated in
general manufacturing, 10 per cent in engineering, 7 per cent in retail and 5
per cent in financial services.

Nearly 40 per cent of HR professionals report that organisations are too
ready to make people redundant to meet short-term changes in demand.

The CIPD’s chief economist John Philpott, said: "Organisations will
continue to carry out redundancies in the next year due to ongoing
organisational restructuring, irrespective of how well the economy performs.

"Organisations are becoming more strategic in their operations and
undertaking change to gear up for domestic and international competition. So
redundancy is no longer simply a defensive cost-cutting exercise."

The most common criteria used by employers to select people to be made
redundant is the employee’s role within the organisation, followed by job
performance and ability or flexibility.

Almost all employers claimed they tried to minimise redundancies with 74 per
cent offering alternative employment in affected posts, 56 per cent placing a
freeze on recruitment and 55 per cent achieving workplace reduction through
natural wastage.

"It is also heartening to see that most employers have paid redundancy
compensation above the statutory minimum," he said.

By Paul Nelson

Comments are closed.