Staff key to riding out economic storm

HOW businesses manage staff will be key to getting the economy back on track according to research released today.

The report – PwC Perspective: Getting the UK back on track – also sites flexibility as a key factor in saving jobs and sustaining business strategy.

With the economy forcing business to scrutinise people-related costs more closely – the study has identified 12 primary ‘people cost’ areas that companies should be assessing and taking decisive action on.

These include pensions; headcount; absence management; expenses; use of contractors; analytics and benchmarking; pay and productivity; incentives; employee benefits; secondments and mobility; flexible working; and HR and finance effectiveness.

Graham Ward Thompson, human resource services partner, PricewaterhouseCoopers LLP in Leeds, said: “The manufacturing industry has taken the lead on offering reduced salaries to save jobs, but businesses in all sectors need to consider different ways to reward and deploy their staff to minimise redundancies.

“Options include opening out flexible working or job-share arrangements to staff who wouldn’t usually qualify. Introducing or revisiting polices on sabbaticals, international assignments and secondments would also benefit many industries. Some employees would welcome the opportunity to take a career break or experience working temporarily in an emerging market or a different organisation, perhaps a client or charity.

“If companies harness the flexibility and creativity needed to minimise redundancies and keep business strategy on track, the workforce at the other end of this downturn could look very different. Larger businesses tend to be slow to respond to market changes – this focus on working practices and policies could help bring the agility they should be striving for.”

The slowing economy is just one of the factors affecting long-term business health.

Demographic changes, resource scarcity, climate change, health and wellbeing, globalisation and technology are impacting organisations’ potential to stay profitable and compete effectively.

Mr Ward Thompson added: “Cash-strapped companies may be feeling the pressure to reduce headcount but this can be a costly exercise – both in terms of payments in lieu of notice and recruiting employees when the market picks up. Keeping staff, in whatever capacity, will make it easier, cheaper and quicker for companies to react when market opportunities and challenges present themselves.”