Alternatives to redundancy


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  • 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

    1. 1. 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 Working • Share admin services with partner organisations.
    2. 2. Shared Services • The Trust has strategic partner organisations and in theory could share some core functions such as HR, Occupational Health, Payroll, and IT. • 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.
    3. 3. Shared Services • 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.
    4. 4. Shared Services • Staff expenses for 2010 were £312.5 million (up from £290.2 million on the previous year). • 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).
    5. 5. Shared Services v Out Sourcing • CIPD survey in 2009 found the out- sourcing HR reduced costs in 90% of cases. • 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.
    6. 6. Shared Services • 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).
    7. 7. Savings • 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.
    8. 8. Redundancy Survivors • 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 reasons’; 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).