Redundancies cost financially, but also in management time, morale and productivity. Plus you end up without the teams and skills you need to compete. But while redundancies may be the only option for some, there are alternatives.

Some of the alternatives require bold steps – and lots and lots of consultation – but they are still options.

I am often asked what clients are doing to stave off redundancies – often by other firms wanting to know what works and what doesn’t. So we have put together an Alternatives to Redundancy Factsheet to outline your options and highlight the issues involved.

Unsurprisingly, the most common steps are pay freezes and recruitment cuts - they are the easiest and most immediate to implement. But tightening the reigns on recruitment doesn’t necessarily mean a ban. One small charity we work with decided to replace a number of retiring senior staff members with lower level recruits. The savings ran into six figures.

Pay cuts are increasingly on the cards, sometimes with shorter hours, but not always. AXA PPP Healthcare, down the road from us in Kent, has given staff the option, among others, of 300 job cuts or a 10 per cent pay cut.

Such a move can certainly make sense. But it can also simply delay the inevitable. Staff at a construction equipment manufacturer voted to take a £50-a-week pay cut to prevent 350 colleagues losing their jobs only to see 398 redundancies a few months later.

But alternatives to redundancy are not all about delay tactics. Far from it. Bold steps can and do make a real difference. So do not be afraid of discussing drastic contractual changes with staff. And keep on talking. If there is one sure way to lose the recession battle, it is to stop talking.

Your people are a major fighting force, keep them and keep them on side and you’ll fare much better in the long run.

Posted by Elspeth Watt
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