03 Jan, 2013

Redundancy Consultation

Controversial news was announced by the government this month reducing the 90 day large scale redundancy consultation period down to 45 days. A range of mixed reactions from the recruitment community highlights uncertainty over whether this move will be successful when it comes into effect from April 2013 across the UK.

Jo Swinson, Employment Relations Minister, insisted the decision was to help businesses and employees alike, saying: “The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.”

Ian Murray, Shadow employment relations minister, among others has argued: “David Cameron should be making it easier to hire, not easier to fire. We need a real plan for jobs and growth, not an attack on people’s rights at work.”

In support head of employment and skills at the manufacturers’ organisation EEF, Tim Thomas commented: “Today’s announcement will send a strong signal to industry that the government is committed to creating the flexible labour market that it needs.”

To combat the view that the redundancy strategy is to make it easier to sack employees, a recent study by Accenture, a management consulting firm, showed that for businesses to expect to grow and be successful more time should be spent on retention through investment in their employees’ skills.

Accenture managing director, Aimie Chapple commented: “UK companies should consider re-thinking strategies for finding the skills they need to support growth. To address skills shortages at all levels, as well as challenges holding onto existing talent, companies may need to integrate their recruitment, skills development and retention strategies… It’s clear that British employers need to think more seriously about the long term outlook when hiring talent, and not just the immediate future.”

While we wait to see the true effect of this cut, reports show recruitment to be on the rise. A survey conducted by KPMG and the Recruitment and Employment Confederation across 400 job agencies showed an acceleration of permanent and temporary job placements. This is particularly true for IT recruitment London which has long been outperforming other sectors with employment. The survey contrasts with Reuters monthly labour market data showing economist expectations for a rise in unemployment, from 7.8{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} to 7.9{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} of the total workforce.

This latest news is one step in a long line of measures the government is taking to address the economic climate and to promote business growth, in hope to make recruitment easier. Recruitment will be evolving its own strategies to help businesses and employees alike.

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