Job cuts 'can be costly'

Redundancies should be considered a last resort by companies looking top cut costs, it has been claimed.

According to the Chartered Institute of Personnel and Development, the cost to firms of making redundancies could reach as much as £16,375 per employee, even before extra costs like higher labour turnover and a fall in staff productivity are factored in.

Chief economist at the group John Philpott said cutting jobs is especially expensive if redundancies are seen as a first resort and decisions have to then be reversed when economic conditions improve.

"We urge employers to plan for recovery by investing in and growing their people, rather than reducing their workforce," he added.

This week, studies carried out by think tank the Tenon Forum found entrepreneurs are increasingly cutting jobs and wages in an attempt to survive in the current uncertain economic climate.

Head of the group Carl Jackson said stated that managers should work with their staff to ensure businesses are in the best possible position to have a successful year in 2009.

Based in Milton Keynes, Aaron Wallis are a recruitment and sales training business committed to sales excellence.

Filed: 07-01-2009