Job cuts to save on wages
MORE than two fifths of local firms are offering voluntary redundancy packages to cut their wage bill, according to the latest nebusiness poll.
Then news that 44% of firms are taking such action is further evidence that turmoil in global financial markets is hitting the Tees Valley’s economy and forcing cash-strapped companies to cut their cloth.
But some Tees Valley business bosses say they are looking to retain skilled workers.
Dan Taylor, co-founder of Marske sales consultancy Giraffe Sales, said he was bringing in six new staff this week.
He said: “Many people in the business community are struggling, but the products we sell save customers money.”
He said the cost of investing in staff training would deter some businesses from making redundancies now and recruiting new staff when economic conditions eased.
“It would cost us three months’ salary to train up the new recruit,” he said. “If you let skilled workers go, you might not get a return on the investment.”
Official figures showed the number of people out of work in the UK soared in the three months to August by 164,000 compared with the previous quarter - the biggest rise for 17 years. With GDP falling 0.5% in quarter three, analysts are predicting further rises in unemployment as Britain slides into recession.
But Jonathan Wheatley of Stokesley IT firm MC Ware, said the wave of redundancies gave savvy businesses the chance to cherry-pick skilled talent.
He said: “We are certainly seeing more CVs on our desk from people wanting jobs.”
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