Small Business Employment Woes Continue
Despite the Government's interest rate cuts and a raft of measures aimed at assisting the smaller business, it seems quite clear that businesses are going to have to seriously consider their staffing requirements in this difficult economic climate.
According to recent research by KPMG and the Chartered Institute of Personnel and Development, 26% of organisations surveyed are planning to make job cuts in the next 3 months and others have frozen recruitment and reduced pay and hours in an attempt to fend off the effects of the economic downturn.
What can businesses do to motivate key staff in such a difficult climate? Introducing commission payments, bonuses and non-financial incentives are one way of generating staff motivation without being ‘saddled' with long term pay increases. However, firms considering such incentives will need to avoid the legal pitfalls in introducing such schemes to ensure that they are applied in a fair and non-discriminatory way.
If strategic redundancies are being considered, they must be considered at an early stage to protect the vitality of a business. It makes no sense to start considering redundancies when the business is on the brink of insolvency, thereby jeopardising the business itself and all employees' jobs.
If redundancies are necessary, ensure that fair and non-discriminatory selection criteria are used. For instance, criteria such as ‘last in, first out' are now considered to be discriminatory on grounds of age. It is also sensible to deal with redundancies swiftly, within legal constraints, to provide certainty for both departing and remaining employees. Again, businesses considering making redundancies should seek early advice to ensure that they comply with the statutory time limits and procedures.
For information please contact Jon Dunkley
