Stagnant labour creates problems
Almost without exception, whether for fast-growing companies or struggling companies, the last 12 months have been a testing and difficult time. Joe Thornhill, joint head of the employment team at Ward Hadaway, looks at the challenges ahead.
THE last 12 months have seen most companies in our region implement cost-saving measures, ranging from a critical approach to business travel, to short-time working and redundancies.
The typical experience has been that employees and unions have been supportive of the cost-saving measures, recognising that the measures had to be implemented if the business was to survive the dramatic economic downturn.
The consequence was that a relatively small percentage of the redundancies and other cost-saving measures during late 2008 and early 2009 resulted in Employment Tribunal claims.
The environment is now changing. For, right or wrong, many employees now believe that the recession is over and that further cost-saving measures are not now required.
This belief is combined with a practical recognition that, if one is made redundant, then it will be difficult to secure alternative employment. As a result, ACAS has recently announced a 22% increase in the number of unfair dismissal claims.
The Employment Tribunal has not yet published any statistics, but it seems inevitable that the value of unfair dismissal claims will rise significantly as Employment Tribunals recognise that any periods of unemployment are likely to be far more protracted than in the recent past.
Beyond this increased willingness to litigate, the increasing level of unemployment will mean that employees are less likely to change jobs because they will place a greater value on job security, and also because alternative employment will not be as easy to secure. In some respects, this reduction in labour movement will benefit employers – but it will also create a variety of problems.
In the past, if an employee was unhappy in a position then they would probably change jobs, but now they may be forced to stay, and that is likely to result in a poor-performing employee – probably with high levels of sickness absence.
Further, an employee subject to disciplinary action for poor work or misconduct in the past would probably have “jumped” before they were “pushed” but now employers will have to follow through on any process to dismissal.
The problems of this slightly stagnant labour market will be exacerbated as companies which have shed staff are keen to drive up productivity and manage for some time in an improving market without recruiting more staff.
Anyone dealing with HR issues in the next few years is going to have to be on top of their game. However, the difficulties are not insurmountable and, with the right advice and guidance, the problems can be overcome.
:: For advice and assistance on the above issues, information on legal packages available or any other employment matter, please contact Joe Thornhill on (0191) 204 4321 or joe.thornhill@wardhadaway.com
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