CIPD: Redundancies cost firms £16,000

06-01-2009

CIPD: Redundancies cost firms £16,000
It costs firms an average of £16,000 every time they make an employee redundant, it has been claimed.

The estimation has been made by the Chartered Institute of Personnel and Development (CIPD) and the organisation suggests that it would be better to retain workers and plan for recovery.

Companies should also think of long-term solutions rather than short-term cost-cutting.

CIPD chief economist John Philpott said that "while making people redundant can seem one of the most straightforward ways of cutting costs, redundancy is itself a significant cost to most organisations with a number of direct and indirect or hidden costs".

However, he did stress that restructuring is a necessity which cannot always be avoided.

Those who have been made redundant may be pleased to hear that the government is planning to create up to 100,000 new jobs in the UK with a series of public works schemes.

Related categories: HR / Recruitment.


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