Credit crunch triggers recruitment freeze

01.09.08

Nearly three quarters of employers are considering a freeze on recruitment as a result of the credit crunch, new research suggests.

The survey, by employment law firm Peninsula, found that 74% of employers have either already implemented or are currently considering a hold on recruitment.

According the research, 64% of bosses admit they cannot rule out the possibility of redundancies. However, employers have been urged to tread carefully when it comes to redundancy to avoid legal ramifications.

“Employers need to consider the cost implications of getting redundancy wrong,” said Peter Done, managing director of Peninsula. “There is clear regulation regarding redundancy that employers must adhere to.

“One slip up by an employer could lead to a significant settlement being made to an employee and any settlement during these tough times is something employers can ill afford.”

Done advised employers to consider alternative options to redundancy first and view job cuts as a last resort.

“A recruitment freeze is seen as fix-it-quick option to employers as staff wages represent the highest cost to a business,” he added.

“However, employers should first be looking to tighten their budget in existing areas of the business such as their recycling policies, print allowances and even things such as ensuring power is turned off whenever not in use. These are all things that can have a significant effect on a company budget.”

© Crimson Business Ltd. 2008