Business leaders have expressed disappointment at the decision, which they say will significantly add to their costs as they struggle to cover the hours their employees will no longer be able to work.  Currently employees also benefit from opting-out of the 48-hour per week rule by maximising their earnings.

Employers can limit the impact of this ruling by introducing annual hours working which allows them to calculate working hours over a 12 month business cycle.  Annual hours schemes can be attractive to both the business and the employees as it builds in the flexibility to ask employees to work longer hours when the work is required and fewer hours as demand reduces.  It also has the advantage of smoothing costs and earnings.

As expected, the unemployment figures have climbed significantly to 1.86 million and it is not the end of the bad news; more the start.

Many employers with  askilled and experienced workforce do not want to take drastic action until they are sure that there is no alternative.  This has been exacerbated by the Christmas break with many holding off making decisions until they see what the New Year brings. 

If you look at it from the employees’ viewpoint there are two schools of thought about whether to announce redundancies before Christmas or after.  Do you tell everyone early so that they plan their spending accordingly? Or do you allow them to have a good Christmas and tell them the bad news in the New Year?

Economic commentators have expressed concern that the figures are increasing so rapidly at such an early stage of the recession.  In my view this is not surprising: we are experiencing the “motorway jam” of employment.  Businesses increased their staff numbers to meet what appeared to be an endless boom without thinking if there was a smarter way of meeting demand. Once businesses realise that we are in for a long recession we may well see unemployment figures rise rapidly to 3 million.

The applicant profile was however, a sign of the times.  Several patently overqualified candidates; all without work having been made redundant.  They were all good candidates who would do an excellent job for the company for a couple of years but it was clear that some were looking for a secure place to ride out the recession.

My client is recruiting because the office is relocating.  Like those businesses which are riding out the storm in reasonable comfort, they have had consistent but what would have previously been considered, conservative growth.  How attractive they look to candidates these days!

My client is also looking for stability; candidates like those who have been in the business for many years. They are the ones who will ensure that the company maintains its stable profile for the next business cycle.

The Directive will give temps in the UK equal rights to permanent staff after 12 weeks with an employer.  This solution was described by the CBI as “the least worst outcome” as temps in the rest of the EU have equal rights from the start of employment.

The directive will require employers to pay temps the same as those who carry out similar work within the business.  Employers should consider conducting a remuneration and reward audit and review their salary structures in preparation for this change as choosing to pay a standard rate for a temp will no longer be an option.

Fortunately for employers, this equal treatment does not extend to sick pay and pension rights although employers should remember that temps are covered by all discrimination legislation.

What we are experiencing is the “motorway jam” of employment. In boom-times employers tend to address increased demand by adding staff to their payroll. When the downturn hits, they take the opportunity to “right-size” their business again.  I have witnessed the effects of failure to think creatively to support business growth.  Invariably there is an overshoot which results in significant job losses; the motorway jam of employment.

There is another way.  Rationalisation is about organising your workforce more cost effectively and efficiently; not just about shedding or adding staff to meet the current conditions.  Every employer should be looking at how they might meet future changes in demand by alternative ways of working which allow you to flex with demand and ensure workforce stability. Versatile working – cutting your employment costs by a flexible approach to work.

Sadly, the way the legislation is written prevents employers from seeing the financial value of flexible working to their business.  Small businesses, in particular, find it harder to see how they can accommodate flexible working, as they may not have enough people to respond to customer requirements.

I have worked with many companies, to help them understand the value of flexible working, and have found that the key is to ensure that everyone benefits from its introduction.  Structured with this goal in mind I have also found:

• that profitability increases as staff costs go down
• employee’s take-home pay remains the same or increases,
• productivity goes up
• premises costs reduce
• the employee gets the flexible working arrangements that meet their family’s needs

It is not just companies with knowledge workers who can benefit: I have supported businesses introducing flexible working to both manufacturing and production environments and seen dramatic improvements in profitability as a result.

This blog is where I will be commenting on all matters of people in businesses – from evaluating the people needs in businesses, through to recruitment, training and development, management and any exit strategies that may be required. I’ll be back here very shortly with more