Saturday, January 10, 2009

Hasty Reaction or Economic Prudence?


In times of economic trouble businesses aren't comforted by the words of Mother Mary saying 'Let It Be' they make staff redundant and then contact employment agencies as business picks up again. I've had employment agencies as clients for more than twenty five years and they love a recession, people get jittery.

Despite Labour winning the last three elections businesses in this country, at least big business, still runs on firmly Conservative lines - it sees staff as a cost and not as an asset. Training in the U.K is generally recognised to be woefully behind our European and Asian counterparts and despite the good news this week that a further 35,000 or so apprenticeships will be created the disappointing fact is that only 59% of all apprenticeships are completed.

As a country we don't plan very far ahead, that's because unlike the Americans, French or Germans there is not the collective will to pursue a national identity. I've done the economic doom and gloom to death but one point remains constant and that is that redundancy on a mass scale leads to stagnation in the country's workforce.

Businesses should look to hold on to their staff if at all possible during the downturn. The Chartered Institute of Personnel and Development (CIPD) has warned that 2009 is shaping up to be the worst year for jobs in two decades. Some 600,000 jobs are predicted to go during the course of the next 12 months.

And yet I still believe that many large companies have simply panicked. One of life's great ironies is that when companies cut staff they actually realise two things, firstly they were probably overstaffed in the first place and secondly redundancy costs a lot more than they think. An average redundancy costs £16,375 and that's without the resultant falls in productivity.

We need to value people more than we do at the moment, we need to invest in people and invest in real jobs. The number of 'easy' or 'soft' degree courses need to be slashed and a radical shake up of the education system needs to be looked at. We are no longer a great manufacturing base for the rest of the world to come to, we are a nation of professionals (yes I know), service industries and small businesses - we need to prepare for the future and come out of a recession better planned than before.

8 comments:

Les Paul Junior said...

One of my mates works for one of Nissan's suppliers and after this week's news he'll be even more worried that he was before.

You'd have thought that avoiding a recession would be something that our government has already addressed but apparently not. I think we've seen three recessions in our adult lives so you'd think the government would be prepared.

They seem prepared for flu epidemics etc but not recession. Makes you wonder, doesn't it.

Paul said...

It could all be part of a bigger plan or just a monumental cock-up!

I think a lot of companies have panicked with regards to redundancies , a lot of companies were over stretched on borrowings, and too many of the larger industries (such as car makers) carried on filling fields with cars nobody wanted to buy.

I do feel sorry for anybody who loses their job. A lot of people got burned in the 80's recession but a new generation hasn't experienced anything like that and none of us experienced the 1930's.

Span Ows said...

bigger plan?....it had occured to me a while ago that the cock-ups were so big and freqeunt and the steps to address the problems seem to be wrong or failing before the 'paint is dry' that maybe it is part of a bigger (sinister) plot...

heads on spikes I tells ya...again...;-)

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