Employers redeploy to avert redundancies

Figures published today show that staff redeployment levels have doubled in the past year, as employers try to find an alternative to redundancy. 

The data, collected from 45,809 individuals in 221 organisations, also reveals an increase in holiday allowances, time off in lieu of work and greater training support as employers attempt to re-motivate staff in the wake of a 'salary slow-down'.

The 2009 National Management Salary Survey, published by the Chartered Management Institute and CELRE, uncovers an 'internal transfer' rate of 5.8 per cent, compared to just 3.1 per cent in 2008. The figure is also considerably higher than during the last major recession in 1991, when internal transfers reached 1.6 per cent. Subscribe now.

The data makes it clear that employers are using internal restructuring as an opportunity to transfer core skills across their business. For example, 6.8 per cent of senior function heads have been transferred over the past 12 months, compared to 2.3 per cent being made redundant. With a view to the long-term, analysis of the figures suggests that employers want to retain junior staff, with 4.9 offered transfers compared to 1.3 per cent facing redundancy.

Yet the survey, now in its 36 th year, reveals that the majority of employers (61 per cent) continue to struggle to retain key staff. Many blame the salaries they are able to offer (47 per cent), job insecurity and the lack of career opportunities (both 46 per cent) and internal bureaucracy (22 per cent).

The study shows that these difficulties come against a backdrop of the lowest movement in earnings for 5 years, amongst the UK 's executives. Take home pay for employees across the country has risen by 4.6 per cent in the past 12 months, a drop from 6.7 per cent for the same time, last year. Those in Northern Ireland (2.4 per cent) saw the smallest year-on-year increase. Outside London , those in Scotland (4.8 per cent) were the biggest beneficiaries.

In real terms this means that the average executive in the UK is earning a salary of £39,770 per year. Outside London , the top earners at 'team leader' level are based in the South East. Bringing home an average of £43,766, their annual income is £5,435 more than those at the bottom of the 'pay league table', in Northern Ireland . Yet, in Northern Ireland it is the trainee staff (earning an average of £18,073) who bring home more than their counterparts across the rest of the UK .

Petra Wilton, director of policy and research at the Chartered Management Institute, says: "It is encouraging to see employers looking for ways to avoid redundancy rather than adding length to the dole queue without a second thought. It shows that business is growing up because today, unlike in 1991, there seems to be more determination to retain skilled staff. Perhaps it is because employers are finally beginning to recognise that retaining competence is a far more cost effective option than rebuilding a talented team from scratch."

In an effort to tackle retention difficulties and the drop in year-on-year earning power, organisations are focused on using inexpensive employee benefits, to keep staff motivated. Average annual holiday entitlement, for example, is now 28 days, an increase from the 25 days reported last year. The proportion of employers offering time off in lieu of extra work has also risen, by 4 points, to 62 per cent in the past year. Many employers (89 per cent) also offer to pay exam fees for their staff and 71 per cent also cover their book costs.

Mark Crail, managing editor at CELRE, comments: "Employers are reacting quickly to the tough economic climate, with pay awards falling and many salary reviews this year resulting in pay freezes. Employers now need to move beyond pounds and pence to look at the other incentives they can offer within the overall remuneration package to motivate staff without breaking the bank."