Redundancy equations don’t add up

by 31 Mar 2009

By Craig Donaldson

The lead news story for this issue, Redundancies on the cheap cost dearly (page 6), looks at the fallout from redundancies. They are a necessary fact of life for many organisations struggling in current economic conditions, and are the quickest way to cut costs out of a business.

However, without a long-term plan in place to help an organisation and remaining employees, the long-term cost and damage can outweigh any initial perceived benefits of redundancies.

Business is always seeking to do more with less, and gains in perform ance and productivity are crucial in these hard economic times. While many companies are implementing redundancies, most seem to be taking a more thoughtful approach in making sure talented performers stay.

This is the first and most obvious step in getting the most out of redundancies.

However, the research from Drake International found that many com panies were still “cutting off their nose despite their face”, with morale, moti vation and productivity diving after most retrenchment programs.

As Drake International notes, organisational restructures “should be about working smarter by changing processes and redesigning job roles”, however, most employers expected to achieve downsizing bene fits by asking staff to work harder.

Good in theory, but fundamentally flawed in practice.