Select employees for redundancy with care

The current economic crisis is causing unprecedented issues as companies need to focus on reducing costs and headcount to survive short term financial challenges.  Yet most CEOs and HR professionals are aware just how important it is to retain the right people in the business to help overcome these challenges.

But why should employees stay and help keep the boat afloat?  Research conducted by performance improvement firm Grass Roots, found that UK companies are worse at saying thank you to staff than they were ten years ago.  The research found that 37 per cent of respondents felt that appreciation shown by bosses has declined during the last decade.  As many as 43 per cent of people stated they had left their last job because they didn't feel valued by their employer. 

In these turbulent times, employees that feel under valued are using the opportunity to move on to high performing companies that reward and recognise their employees.  Specialist skills are still in huge demand (IT skills shortages in the UK reached their highest level in 10 years in February 2008) and job boards are filled to the brim with opportunities.

I always advise my clients when considering reducing headcount to consider the long term impact of their decision.  Whilst the law is geared around making sure that the employer has thought of every alternative to redundancy, there are strong commercial arguments to support this.  The Chartered Institute of Personnel (CIPD) estimates the cost of replacing an employee is almost £5,000. In the case of specialist skills and more senior roles, it is estimated to be as much as 1.5 times their salary.  And what about the impact on staff morale if indiscriminate staff cuts are made and not dealt with in a sensitive manner?

Recrion advises clients on redundancy selection processes that are geared at right sizing a business without losing its competitive edge.  As Jim Collins (Good to Great) stated "People are not your most important asset. The right people are".

Visit www.recrion.co.uk or call +44 1780 484910 for more information.