Find some examples! E.g. Marchington and Wilkinson, Human Resource Management at Work 2008
Philpott, J., 2010. Labour cost savings from alternatives to redundancy. Impact, Issue 27. pp24-27.
Appelbaum, S.H., & Donia, M. 2001. The realistic downsizing preview: a multiple case study, part I: the methodology and results of data collection. Career Development International ,6 (3), pp 128-148
Alternatives to redundancy
Alternatives to Redundancy
• Labour cost savings whilst ensuring
redundancy remains a last resort.
• Short time working
• Annual Leave Purchase Scheme
• Multi-skilled employees
• Organizational Flexibility & Flexible
• Share admin services with partner
• The Trust has strategic partner organisations
and in theory could share some core functions
such as HR, Occupational Health, Payroll, and
• Sharing of pathology, maternity and
pharmaceutical services is also an option.
• Current partner organisations are Papworth NHS
Trust, Cambridge & Peterborough NHS Trust,
and The University of Cambridge.
• Source: Annual Report & Accounts 2009/10 Cambridge University Hospital’s NHS Foundation Trust.
• Papworth Hospital is ideally placed to
share services as it is to move to the
Cambridge Biocampus in the near future.
• Cambridge University has a major
presence on the campus, as does Cancer
Research UK and the MRC.
• The Regional Blood and Transplant
service is also on site.
• Staff expenses for 2010 were £312.5
million (up from £290.2 million on the
• Administrative and Estates account for
1,485 staff in 2010 (up from 1,398 in 2009)
out of a total of 7,361 (6,977 in 2009).
Shared Services v Out Sourcing
• CIPD survey in 2009 found the out-
sourcing HR reduced costs in 90% of
• In practice outsourcing of HR does not
always run smoothly (BP & Exult/Hewitt,
C&W & Accentre)
• Survey evidence suggests that out-
sourcing often disappoints in practice
• Sources: Kew & Stredwick, 2010 Human Resource Management in a Business Context; pp 27-28 CIPD London.
• Taylor, S. 2010 Resourcing & Talent Management; pp 66 CIPD London.
• The NHS often shares HR and other services
between Primary Care Trusts (PCT’s).
• Advantages: cost savings in terms of space
allocation and staff resources. Greater
efficiency. Larger pool of professional staff.
• Disadvantages: Potential loss of local focus,
potential loss of quality, loss of managerial focus
on services. (Redman et al, Fulop et al). May be
seen as a retrograde step (return to old Health
Authority type management).
• CIPD Research shows that on average,
redundancy saves 40% less per employee than
freezing recruitment or terminating temporary
agency worker contracts. (Philpott, 2010)
• The Trust uses temporary agency staff (363
during 2009/10) and these accounted for £8.4m
(2.6%) of the employee costs for 2009/10.
Whilst not an insignificant amount, not an area
where large savings can be made.
• A key element of the redundancy process is to
minimise ‘survivor syndrome’.
• Three issues are key:
i. Maintain employee confidence by showing that the
redundancy programme is being undertaken for the ‘right
ii. Ensure the duration of the programme is minimal but also
effective so that it doesn’t need repeating;
iii. Ensure that the terminated staff are treated with care
dignity and respect- this sends a signal to the surviving
employees that they too would be treated well should the
process need to be repeated. (Appelbaum & Donia, 2001).