Employers could hold off making redundancies and avoid having to re-recruit employees by instead offering staff reduced hours and paid leave.

That is according to accounting and consultancy firm KPMG, which has said that it wants to keep hold of its “talented people” by putting “contingency” plans in place.

By offering staff a shortened four-day week or the option to take short-term leave on 30 per cent pay for around one to three months, the company hopes to avoid making redundancies.

Commenting on the issues faced by many firms in the economic downturn, a spokesman for KPMG said: “Often you find when companies make redundancies they lose a lot of that good talent and when the market
picks up again they need to recruit back the people you have let go.”

Unemployment in the UK reached close to two million between September and November 2008, according to data published by National Statistics, which is the highest it has been in over a decade.