Employers urged to consider alternatives to redundancy

Posted 29/06/2009

Businesses have been urged to consider redundancy as a final option, as laying off workers could negatively impact on their firm.

According to Steward Gee of Acas, trimming the workforce to save costs in the current economic climate could have “wide-ranging” consequences.

Speaking to the Daily Mail, he warned that this could include reduced morale among other employees – which could potentially affect their productivity.

Furthermore, Mr Gee suggested that cutting the workforce too much could lead to businesses being less able to benefit from an economic recovery when it takes place.

“Firms may be unprepared when the economy picks up,” he stated.

“We encourage firms to consider the alternatives first.”

The comments were reinforced by Ruth Spellman, chief executive of the Chartered Management Institute, who warned that making “knee-jerk” decisions on redundancy can end up costing businesses more in the long run.

She said this is partly because when the economy is recovering, they may need to pay over the odds to attract talent that they should have retained.

Rising redundancy levels across the UK have contributed to unemployment reaching a 12-year high of more than 2.25 million.