INDUSTRY BODYChris Swerling, head of HR, BPIF
"When businesses are suffering I advise not to be temped to reach for the P45s. Forward-thinking companies look for alternative ways of reducing costs to maintain a certain level of capacity and be better equipped to take advantage of the upturn when it comes. Retaining skills is essential in our industry and therefore redundancies should be the last resort, not least because they are costly in themselves and even more so if you don’t follow correct procedures. Getting the consultation wrong, failing to listen to your employees and not showing a degree of flexibility will be a costly experience. On the other hand, done well, it will result in valuable skills retention."
TRADE UNION
Tony Burke, assistant general secretary, Unite
"Unite has a policy of opposing cuts in pay – it is a myth that it saves jobs and there are very few instances where that has been the case. We have a lot of experience of our members taking up to 10% cuts in pay on the promise of avoiding redundancy, only for redundancies to happen anyway, or for the company to close. What’s more, it demoralises staff to take cuts and, of course, they will always push for bigger increases down the line in order to recoup the lost earnings. Sadly, a number of companies, because they know staff fear for their jobs, have used the recession to force through pay cuts and changes to working conditions when they weren’t required."
DIGITAL PRINTER
Paul Beaumont, managing director, FST Technologies
"It is difficult to say because it often depends on what situation the business finds itself in. As for making that decision, for me, it [pay cuts] would always be the last resort. Making such a decision also sends out a bad message to the business and the marketplace. You could have a loyal workforce but actions can end up leaking out and you also risk upsetting your customers. That said, if it came to it, I would always start at taking a larger cut, say 25%, at director level, before moving to smaller percentages at staff in operational roles as; more often than not, they are likely to feel it harder."
COMMERCIAL PRINTER
Dale Burgess, sales manager, Advanced Business Equipment
"In principle, the pay-cut approach may be a better option as it keeps business running and people in jobs. If businesses fail and people are let go then they become dependent on the state and we can start a downward spiral with fewer taxpayers paying higher taxes to support a growing number of unemployed. It is impossible to sustain an economy without people putting capital at risk to start and run businesses. This becomes more difficult as unemployment increases. The other thing that will probably happen is that the pay cuts will be made anyway, just a little further on in time, because people want to pay less in a shrinking economy."
