Managing the downturn
As the third quarter of 2009 rolls in, Excel Recruitment examines the measures employers are currently taking to strip out costs and keep talent in their businesses.
17 August 2009
Entering the third quarter of the year, there is no doubt that employers throughout Ireland are still feeling the effect of the recession. However, companies are working hard to find a way to deal with the economic climate and most recent evidence supports that a few are even increasing their head count.
The large slow down in the rate of unemployment can be attributed to three factors: emigration, the exodus of foreign labour, and a slow down in the rate of redundancies. Companies still have a need for staff, and we have found most are looking at a variety of ways to save costs in relation to their payroll without cutting numbers. The challenging economy is causing employers to think of ways in which they can save money and retain employees. Here are some ways employers are attempting to do so:
Bonuses have become somewhat a thing of the past in the retail and FMCG industry. A large number of companies have simply put them on ice and honestly announced to staff and management that they would not be paid. The vast majority of bonus payments are performance related. With the majority of businesses under-performing, linked in bonuses are (fairly) not being paid out.
2 Remuneration in Q3 2009
Employers continue to be conservative with pay increases this quarter. As Ireland’s private industries quickly took measures to reintroduce competitiveness, the retail and FMCG industries followed suit. Outside of binding agreements (and in cases, within them) the majority of employers in our sector will not be awarding pay increases, with an ever growing number demanding wage cuts. These wage cuts are typically between 5 and 10% with a small minority above.
3 Delaying start dates
Where possible, in an effort to secure talent but delay the expense of securing same, employers are pushing out start dates for new hires into the next month or next quarter, allowing time for budgets to catch up.
4 Temporary leave
Employers are offering temporary leave of absence from employment. This can range from a career break for a year or two to an employee being asked to work three weeks out of four. Many employers have instituted mandatory career breaks
5 Revised sick policies
Many employers are changing their sick time or paid time off policies in order to cut costs this year, offering fewer days, not allowing days to roll over, or limiting the amount of days that can roll over.
6 Less perks and benefit
Whether it is a change in the company healthcare plan or a reduction in the employers’ contribution to the company pension, employers have had to seriously evaluate the length, breath and cost of benefits in their business. Apart from healthcare and pensions, other areas impacted are free condiments, employee incentive trips and academic reimbursement.
Employers are trying to protect their businesses and the jobs therein. Irish employers are becoming more creative and adept at doing this, examining each part of their business before going down the route of redundancy and lay off.