A united call on employers to look at alternatives to redundancy has come from employment professionals and organisations.
Arbitration service ACAS, StaffShare and the Skill Exchange Partnership have made the call as a further 38,000 increase in unemployment was announced on Wednesday (August 17), with the total now approaching 2.5 million people.
John Taylor, chairman of the Skill Exchange Partnership and chief executive of ACAS, said: “The short-term costs of redundancy are very high, although they may result in medium-term savings for the organisation.
“However, the long-term cost of redundancy must be taken into consideration. The obvious costs are benefit payments, the loss in tax and National Insurance revenues, and the loss of VAT because of lower spending.
“Then there is the cost of recruitment when the upturn comes, and perhaps the cost of retraining. Less easily quantified is the social cost to the individual, and the economy, of being unemployed, and the cost associated with the loss of skills if they retrain.
“It makes good business and economic sense to consider the alternatives to unemployment.”
David Lennan, former director general of the British Chambers of Commerce and also a founding director of StaffShare, the online skill exchange and secondment service, said: “Any unemployment has a huge human cost, but the increases we have seen recently will have an horrendous collective social impact. Employers are far too quick to make people redundant when cost savings have to be made. They must have a responsibility to look at the alternatives.
“New approaches, such as secondment, job sharing and flexible working would all reduce the need for redundancy, and at the same time save the skills that are inevitably lost when people lose their job.
“Employers have for decades been pouring skills down the drain, only to then have to fish them out again when the recovery comes.”
The Skill Exchange Partnership was set up earlier this year as an independent professional group providing a collective voice in direct support of skill retention through secondment and other new workforce management techniques.
David Lennan continued: “Businesses need to come out of the dark ages and modernise management approaches to downsizing and skills.
“Unemployment is devastating both to those involved but also to the economy. The continual cycle of employment and redundancy, training and re-training, must stop. There are viable alternatives to redundancy, enabling companies to retain skills that would otherwise be lost, allowing the peaks and troughs of employment to be smoothed, and ending the rush to make mass redundancies every time there is downturn in the economy.”