Survey shows more redundancies on the way

Nearly half of organisations that have carried out redundancies in the past 18 months plan to make further cuts this year.

This was the main finding of the Chartered Institute of Personnel and Development's (CIPD) first ever report on redundancy workplace attitudes. The majority of organisations also reported a decline in employee morale following redundancies.

CIPD Chief Economist John Philpott said: "Organisations will continue to carry out redundancies in the next year due to ongoing organisational restructuring, irrespective of how well the economy performs. Organisations are becoming more strategic in their operations and undertaking change to gear up for domestic and international competition. So redundancy is no longer simply a defensive cost-cutting exercise.

"The good news is that most organisations seek alternatives to redundancy and recognise that redundancy has an adverse impact on employee morale. It is also heartening to see that the majority of employers (72%) have paid redundancy compensation above the statutory minimum. Such a sensitive approach may explain why many of those made redundant seemed philosophical about the decision."

He added: "Redundancy is not the threat it used to be, particularly among younger people."

The main findings of the report indicated that a large proportion of organisations (45%) believed that they would need to make further redundancies over the next 12 months. Redundancies are concentrated in general manufacturing (17%), engineering (10%), retail (7%) and financial services (5%). The report revealed that three-quarters of the lay-offs were compulsory.

According to the CIPD over a third of HR professionals said that organisations were too ready to make people redundant to meet short-term changes in demand.

The report also revealed that over half of HR professionals said that younger people were less worried about the prospect of redundancy while one third said that employees do not see redundancy as the threat it used to be.

The report, Best of a Bad Job, surveyed 563 organisations which, during the last 18 months, made at least one employee redundant.

The CIPD commissioned IRS Research to undertake the research during April and May 2002.

The three main criteria used by employers for selecting people to be made compulsorily redundant included the employee's role within the organisation (68%), job performance (62%) and ability or flexibility (52%).

The report noted that many organisations sought to minimise the number of redundancies by offering alternative employment, placing a freeze on recruitment, or achieving workforce reduction through natural wastage.

(SP)