Recession-based Employment Tactics

UK Law Firm Irwin Mitchell today revealed a telling report showing that there is a huge lack of confidence in the economy and that businesses are three times more likely to encourage voluntary redundancies during the next 12 months compared to two years ago.

Other key findings from this survey of 320 senior business decision-makers are:

• One-third of businesses had made compulsory redundancies in the last year, with 75% of those also using a range of alternative cost-saving techniques.
• Seven out of 10 firms said they are "less confident" or expect "no improvement" in the U.K. economy in 2012 and 18% said they are "quite likely" or "very likely" to make compulsory redundancies during the same period.
• Out of those businesses stating they needed to reduce their employee cost base over the next 12 months, just over half (55%) said that they would introduce a voluntary redundancy program. This compares to just 16% of companies that did the same during the last two years.

In addition, firms are more likely to cut down the use of agency workers, freeze pay, grant unpaid absences, remove other benefits such as bonuses and reduce staff hours in the next 12 months compared to two years ago.

Outside of compulsory redundancies, the most popular method used to reduce the employee cost base during the last two years was freezing pay rises, so UK employees can expect their pay to be frozen during the next 12 months!

The full report can be found here.