Firms encourage voluntary lay-offs

NORTH WEST businesses are almost three times more likely to encourage voluntary redundancies during the next 12 months than they were two years ago, according to a new survey.

Law firm Irwin Mitchell’s survey into employee restructuring also found that 78% of firms in the region had looked at various cost-saving techniques when dealing with employee overheads, while 39% had made compulsory redundancies during the past year.

Some 70% of firms surveyed said they were either ‘less confident’ or expect ‘no improvement’ in the UK economy in 2012, and 54% said they were considering whether they need to reduce staff overheads in the next 12 months – 26% said they were either “quite likely” or “very likely” to make compulsory redundancies.

Of the firms that have already taken action, 68% believed they had saved jobs. Some 10% who had restructured said they would do things differently if they had the opportunity, but largely on the basis that they should either have cut more posts or acted more quickly.

Ed Cotton, an employment partner at Irwin Mitchell’s Manchester office, said: “Businesses have been using more inventive solutions than redundancy when tackling staff costs but more now seem to be focussed on some form of redundancy programme.

“Perhaps this indicates that alternative solutions have been exhausted.”