New management thinking needed to reduce redundancies across the UK

Unions and business leaders will come together to discuss alternatives to redundancy at a seminar at TUC headquarters in London last week.

The need for new thinking is clear, says the TUC, 632,000 employees were made redundant in the past twelve months, an increase of 7.5 per cent on the previous year.

The TUC fears that many of those being made redundant are not finding their way back into the labour market, with the number of job seekers currently outnumbering vacancies by over five to one.

The debate – Redundancy Isn’t Working – will consider why UK businesses continue to rely upon dated redundancy policies, which not only inflict massive social costs on employees and the economy, but also waste skills and training investment. The seminar will also consider the alternatives.

Speaking at the event, TUC General Secretary Brendan Barber will say: ‘Too many businesses adopt a knee-jerk reaction to cost management. Making redundancies is not the only option, nor is it the most efficient in the longer-term.

‘We need to concentrate on finding alternatives that could avoid the huge waste of people and skills, and help businesses better respond to the upturn when it comes.

These could include negotiating to share out the existing work more fairly and using creative solutions like sharing and seconding staff.

‘There will still be times when redundancy is inevitable, but it should be the final option, not the first. All too often annual profits are aggressively managed simply to avoid taxation, rather than looking for smarter ways to reinvest into the workforce that created them.’

Brendan Barber and ACAS Chief Executive John Taylor, will be joined on the panel by David Lennan, former Director General of the British Chambers of Commerce and founding Director of StaffShare. David Lennon will say:’When employers say that there are no real alternatives to redundancy, I suggest secondment to other companies. The use of staff secondment is just one of the fundamental changes employers can and should make to change the way they manage their businesses and treat their most valuable assets – their employees.
‘It is also an ideal way of increasing staff skills and retaining them, while reducing costs. Until recently, secondment was not generally practised by ‘unconnected employers’ because of matching difficulties and complex administration. This has now changed and secondment is today a real and viable alternative to unemployment.’

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  1. I’m with those featured in the article as regards the economic, social and individual costs of making staff redundant. Sharing out the work more equally makes a lot of sense where it’s practicable to do so.

    The economic barriers to this work-sharing approach are formidable, though. A very, very high percentage of employees working full-time are barely able to earn enough to pay essential bills; they fall into debt when they do fewer hours and their pay drops. Employers worry so much about survival during this recesssion they’re unlikely to accept any solutions which mean extra staff costs.

    Government might be able to help. There might be little difference between the bill for paying 100% Benefits to those losing their jobs completely and that for paying “top up” allowances to larger numbers of people sharing their jobs but unable to survive on the reduced salaries. If the bills are much the same, a rational government should opt for the course which protects the UK’s longterm prospects better – ie job sharing.

  2. When Mitsubishi closed two ship yards in Japan in the 80’s they had a combined workforce of 35000 people not one person lost their employment with Mitsubishi. The company took the view that they had already invested a lot of time and money in those people assets so they diversified in to other industries. It is not possible to do that in the UK due to the short sighted way UK manufacturing is led, and the unwillingness of government to actually control and manipulate market forces.

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