Cutting staff is last resort for struggling firms in US

Companies in the US are looking at all other cost cutting alternatives
before making redundancies in order to cope with the economic downturn.

A survey by the Society of Human Resource Management shows that 63 per cent
of employers use staff attrition to cut costs and 49 per cent opt for an
employment freeze.

A fifth of the 570 HR professionals surveyed say they don’t renew contracts
and a similar proportion encourage staff to take holidays.

More than half of respondents cite declining profits as the main factor that
eventually led to the decision to lay off employees and 45 per cent blame
restructuring for having to make redundancies.

Nearly 40 per cent of HR professionals who took part in the survey say the
state of the economy led to a decision to axe staff.

Helen Drinan, SHRM president, said, "Layoffs are disruptive and
difficult for everyone and most organisations are taking steps to avoid them if
possible. The majority of those companies that can’t avoid layoffs are offering
severance packages that include a variety of benefits."

The research shows that redundancies have a serious effect on staff morale,
with 58 per cent saying confidence fell after layoffs were announced and 54 per
cent of respondents reporting in-creased gossip. To combat this more than half
of respondents indicate they tried to improve communication and 28 per cent
held morale-boosting events.

Drinan said, "It appears most organisations are missing an important
opportunity. They could and should do more to boost morale for employees
remaining with the organisation to stem further turnover and to increase
productivity."

www.shrm.org

By Ben Willmott

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