Redundancy still a threat for employees

The prospect of redundancy has been a constant threat for employees throughout the recession, and, according to a recent survey, this uncertainty over job security seems set to continue in 2013.

Redundancy survey

The survey, by Right Management, the talent and career management wing of ManpowerGroup, questioned 783 businesses across the UK, and found that around 8% are uncertain whether they will need to make redundancies in the next six months. The comparable figure for 2012 is only 2%.

In addition, the number of businesses reporting that they will not be making any redundancies has fallen - from 81% in 2012, to 77% for the first six months of 2013.

Global position is even worse

This is still better than the global average, where only 69% of employers report that they are not anticipating any redundancies. The survey also found that no UK employers were expecting to make significantly more layoffs, which is a welcome drop from the 4% who anticipated doing so during 2012.

Mark Hodgson, practice leader of Talent Management in Right Management UK & Ireland, commented that the number of well-known stores disappearing from the high streets was a reflection of the fact that businesses are losing confidence in their ability to make it through the next six months without needing to make job losses.

“Employers don’t want to lose talented staff but they often think that making redundancies is the only way they can cut costs,” he explained.

Redeployment

One option that is sometimes open to employers who wish to avoid the need for redundancy is to redeploy staff who are at risk of losing their job. Under redeployment, staff under threat of redundancy are found suitable alternative work within the organisation.

However, the Right Management survey found that only 22% of employers in the UK believe their businesses are effective at redeployment. This is not a problem unique to UK businesses, as almost 30% of global businesses believe their organisations are “not too effective” or “not at all effective” at redeployment.

According to Mark Hodgson, these figures suggest that employers don’t consider redeployment to be a feasible way of making sufficient cost savings. He warns employers not to underestimate the value of having a flexible workforce, especially during tough economic times.

“Redundancies shouldn’t be the only option,” he points out, “employers need to consider alternatives rather than losing skilled and talented staff who they will want back when the economy picks up again.”

Change to redundancy rules

Although the threat of redundancy looks likely to remain constant for employees for at least the next six months, the practicalities of carrying out redundancy exercises are in a period of transition for employers.

The UK Government recently announced a number of changes to collective redundancy rules, which it says will improve the process and make it easier to understand.

The changes the Government plans to make include:

• reducing the current 90 day minimum period, before very large scale redundancies can take place, to 45 days,
• legislating to make clear that fixed term contracts which have reached the end of their natural life are excluded from obligations for collective redundancies consultation, and
• introducing new non-statutory Acas guidance to address a number of key issues affecting collective redundancies consultation.