Outgoing TUC general secretary Brendan Barber has stressed that redundancy is not an effective measure for stabilising organisations during the recession.
Speaking yesterday at Redundancy Isn’t Working, held at Congress House in Central London, Barber said that the measure in fact contained hidden costs, as a result of skills fallout from losing long-term employees.
Describing employees as the most valuable assets that employers have, Barber suggested alternatives to redundancy that would help to maintain the balance between staff numbers and business needs. “These could include negotiating to share out existing work more fairly, and using creative solutions like sharing and seconding staff,” he said.
Barber went on to point out that, in addition to the social and economic costs of redundancy, there is significant damage to the morale of all people involved with it. “Even when the economy is doing well,” he said, “only 30% of unemployed people have found alternative employment within a three-month period.” That dip in morale, he added, also impacts those left behind, who are under pressure to deliver the same level of output despite cuts.
Some 632,000 people were made redundant in the past twelve months – a 7.5% increase on figures from the previous year.
According to David Lennan, director of skills exchange Staffshare, the cost of investing in a new staff member could reach up to half a million pounds over ten years. Losing an employee at the end of this process, he said, is a strategic mistake – and the cost of recruitment and training to re-fill the jobs that have previously been cut will be only compound it in the long run. “This is, therefore, not effective cost management”, Lennan said.