The Chartered Institute for Personnel and Development and KPMG Labour Market Outlook, surveyed 721 UK employers on their redundancy plans over the coming months as the credit squeeze increases pressure on businesses Cash Flow Problems

It found that 26% firms polled have contingency plans in place to make further redundancies over the 12 months in addition to those job cuts already planned.

The latest research from the Chartered Institute for Personnel and Development; reveals more than one in four employers planning to make new or further redundancies in the next year, further highlighting the Cash Flow Problems

The survey also reveals that the average cost of making an employee redundant across all sectors is £10,575.

Dave Conder, human resources director at KPMG, says: “Redundancy doesn’t have to be the only cost reduction option for businesses during difficult times. Redundancy is sometimes a short-term fix to the problems that businesses experience in a downturn.

“There is no doubt many businesses will have to look carefully at their cost reduction options and weigh up the short and long-term effects to their businesses.”

Dr John Philpott, chief economist at the CIPD, says: “The spectre of redundancy is beginning to haunt the UK jobs market once again. Employers have held off from making large-scale redundancies until recently but we are now on the verge of a torrent of bad news.”

While it’s true that redundancies can offer a business short term cash flow results businesses are reminded that making a person redundant is not cheap ad that other alternatives should be considered

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