Employers seek alteratives to compulsory redundancy

Employers are using alternatives to compulsory redundancy – including voluntary redundancy and reducing hours – more than they did two years ago, according to a survey by law firm Irwin Mitchell.

The survey of 323 senior business leaders found employers are three times more likely to encourage staff to take voluntary redundancy in the next year than they were during the 2008/09 recession.

A third had used compulsory redundancy in the past year, but only 18 per cent were likely to use it in the next 12 months.

Three-quarters said they were using a range of ways to cut staff costs, including pay freezes. This is expected to become more common in the next year.

Other cost-cutting methods included reducing the number of agency workers, offering unpaid leave, stopping benefits such as bonuses and cutting hours.

Some 78 per cent of employers who had used alternatives to compulsory redundancy said jobs had been saved as a result, but 43 per cent were not sure they had made the right decision. Many said they had not taken difficult decisions quickly enough.

Nevertheless, 61 per cent said it was unlikely they would make redundancies in the next year and only 18.6 per cent said they probably would. However, a fifth said they expected to restructure in the next year.

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