Downsizing trend continues as cutbacks bite

More than two out of three employers have reduced the size of their
workforce over the past two years.

The finding, in a study by IRS Employment Review, shows a similar proportion
of employers predict they will downsize in the next 12 months.

The survey shows that nearly 90 per cent of companies use compulsory
redundancies as their preferred method of downsizing, although voluntary
redundancies and natural wastage are also widely used.

Nearly nine out of 10 organisations surveyed select staff for redundancy by
skills levels and competency. They rely heavily on line managers for that

Nearly 60 per cent of employees take account of staff attendance records
when selecting redundancies, 55 per cent take disciplinary records into consideration
and a similar percentage use past performance data.

Most employers offer more than the statutory minimum redundancy payment – a
week’s salary for each year worked.

Outplacement and counselling services are also becoming more common.

The research, which included responses from 60 large organisations, shows
that employers that recognise trades unions are less likely to have cut back
their workforce during the past two years than those that do not.

IRS Employment Review managing editor Mark Crail said: "Lessons learned
from the last recession show that shedding staff too quickly can leave skills
shortages when the economy picks up. An alternative may be for staff to take
time away from work such as returning to study.

"Increasing efficiencies and cutting overheads does not have to be at
the cost of skilled employees."

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