AS THE North-east continues to feel the effects of the current downturn, many businesses have been forced to make significant savings, often resulting in redundancies.
Recent statements from industry and government leaders show confidence in the future of the North-east economy and the recovery oil and gas market in particular.
So how can companies avoid a loss of talent and ensure short-term cost saving measures don’t adversely affect the future potential of the organisation?
Bosses faced with cutting costs usually want to turn to large-scale redundancy as a last resort.
Although reductions in headcount can make significant savings, companies generally want to avoid losing key personnel, vital skills and irreplaceable experience – making it essential to explore other options before letting people go.
Freezing overtime and stopping recruitment are quick and easy ways to save money, but when the cuts required run deeper, Empire has seen clients exploring alternatives to redundancy with significant success.
Voluntary redundancies can be a less painful start to reorganisation, but it is not always the most effective means of managing a redundancy programme.
Speaking with employees can be a rewarding start - engaging staff at the review and planning stage, before any firm decisions have been taken can yield real results.
Those on the “shop floor” are often in a better position to highlight saving opportunities not always visible to the senior management team.
Also, many of our clients have gained employee buy-in to wage cuts which will be reviewed when the market improves.
Understandably some business leaders are nervous about “over-engagement” unsettling staff.
This is where Empire’s teams of experts support our clients in ensuring these discussions are carefully planned and staff feel involved, their views considered and as a result feel empowered to drive change themselves.
The key to the success of measures which will alter staff terms and conditions, potentially detrimentally to the staff, is transparency, engagement and sound business reasoning, all backed by specialist legal support.
In most cases, you will find employees keen to work smarter, harder and potentially for a little less, if in the long term this will potentially secure the future of their role.
Changes in hours worked, where personnel accept reduced pay for fewer hours at work can also help a business looking to reduce its wage bill, but keep valuable staff on board.
An increasingly popular option in reducing the salary bill is voluntary sabbaticals, paid at a much-reduced rate or unpaid. This option gives staff the chance to take a long sought-after worldwide trip, care for an elderly parent, or enjoy time with children.
Sometimes, of course, redundancies are essential, but ultimately the outcome must be a business better positioned for the future, retaining and attracting the right staff.
Exploring the alternatives to redundancy and ensuring the legal implications are well managed will put businesses in a stronger position when times improve.