Struggle to balance cost cutting with productivity

HR professionals in manufacturing are facing the dilemma of how to balance
cost cutting with improving staff productivity as the sector moves into

Figures released earlier this month by National Statistics show that
manufacturing output fell by 2 per cent in the three months to June. This was
the second consecutive quarterly fall and the largest for 10 years.

David Yeandle, deputy director of employment policy at Engineering
Employers’ Federation, said, "While many manufacturers are under pressure
to reduce costs, reorganise their structures and make redundancies, they are
also facing skills shortages and are struggling to attract and retain the right
employees. It is a difficult balancing act."

The CIPD’s chief economist, John Philpott, said HR needs to consult staff
and provide support after redundancies are made.

He said, "If a company has to lose staff it can’t do it in a
heavy-handed way which increases the suspicion of the entire workforce and
damages their long-term commitment."

HR also needs good staff appraisal systems. Anne Minto, director of HR at
Smith Industries, said, "If you find yourself in a situation where you
have to cut staff you need proper selection criteria in place. It has to be
like ducks in a row."

More than 100,000 jobs have been cut in the sector this year, and the
T&G union is warning that a further 250,000 jobs are at risk in the next
two years.

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