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Employment
How can Employers mantain their bottom line when the Credit Crunch begins to bite ?
Business 7
October 2008
s the credit crunch starts to bite deeper, employers are looking to maintain their bottom line. How they manage to reduce their costs, whilst minimising damage to their business, will be an important factor in determining how they come out the other side. Employers are looking to reduce overall wage costs, but the blunt instrument of redundancies can be both expensive in the short-term and counterproductive, particularly if they are handled badly. Apart from the management time and focus, which is required to successfully implement a redundancy process, the organisation may suffer poor morale and productivity during and after the process. This can have damaging effects on the profitability of the business, and also result in costly employment disputes.
Before embarking on a redundancy process, employers are well advised to consider what other payroll savings can be made, such as reductions in overtime or other premium payments, or encouraging staff requests for flexible working. Many employees may be willing or even eager to reduce the number of days a week that they work, or reduce their working day to facilitate childcare arrangements. Many employers have been reluctant to diverge from the traditional 9 to 5 working day, but may find that significant savings can be made if they allow employees to work within school hours. They may also reap the benefits of improved levels of retention and employee satisfaction as a welcome side effect. Home working is another option, which may reduce office and travel costs, and is often popular with employees.
However, if sufficient savings cannot be made without resort to redundancies, employers should be aware of the rigid legal requirements of the redundancy process. This is particularly so when 20 or more employees are affected. Employers should ensure that that they plan properly and that they comply with the requirements of employment law. Consultation, consistency and fairness are vital to successfully carrying out the redundancy process. These principles will enable employers to minimise the negative effects to the business, such as poor employee morale and costly employment disputes.
If employers are flexible and take action in a careful and sensitive way, they can save costs and protect their bottom line in the current difficult economic conditions.
Before embarking on a redundancy process, employers are well advised to consider what other payroll savings can be made, such as reductions in overtime or other premium payments, or encouraging staff requests for flexible working. Many employees may be willing or even eager to reduce the number of days a week that they work, or reduce their working day to facilitate childcare arrangements. Many employers have been reluctant to diverge from the traditional 9 to 5 working day, but may find that significant savings can be made if they allow employees to work within school hours. They may also reap the benefits of improved levels of retention and employee satisfaction as a welcome side effect. Home working is another option, which may reduce office and travel costs, and is often popular with employees.
However, if sufficient savings cannot be made without resort to redundancies, employers should be aware of the rigid legal requirements of the redundancy process. This is particularly so when 20 or more employees are affected. Employers should ensure that that they plan properly and that they comply with the requirements of employment law. Consultation, consistency and fairness are vital to successfully carrying out the redundancy process. These principles will enable employers to minimise the negative effects to the business, such as poor employee morale and costly employment disputes.
If employers are flexible and take action in a careful and sensitive way, they can save costs and protect their bottom line in the current difficult economic conditions.
