Half of UK workers have taken actions that help companies survive the recession, according to research commissioned by R3, the insolvency trade body. By accepting pay freezes, working longer hours or making other changes to their work patterns, they are helping companies stay afloat and preserving jobs.
The poll commissioned by R3 the Insolvency trade body the shows that during 2009:
- One in three workers have worked overtime or longer hours without extra pay;
- One in ten have deliberately not asked for a pay rise in view of the recession;
- One in ten have taken unpaid leave;
- One in ten accepted a pay freeze;
- One in ten did not receive a bonus that they expected to receive;
- One in two people who work have taken at least one of these actions.
Insolvency Practitioners think these actions can play a key role in helping a company prevent insolvency. 42% of R3 members believe these activities can be the ‘magic bullet’ to help save a failing business and 91% think they can be helpful as part of a package of measures.
According to press reports, the following companies all asked staff to make personal sacrifices to secure the company’s long term future:
Honda: In August, Honda’s Swindon factory announced it was closing down for a four-month break – staff were asked to take a cash payout to leave and those who remained were paid in full for two months and at 60% for the next two months.
British Airways: British Airways pilots accepted 2.6% pay cuts. In return, they received shares in the company in three years time worth £13m. Also at BA, 7,000 staff agreed to take part in cost-saving measures, including 800 who said they will work unpaid for up to a month. Most opted for unpaid leave.
BT: BT said they would give staff an upfront sum of 25% of their annual salary in return for taking the entire year off. Staff were also given the option of a one-off payment of £1,000 for going part-time.
KPMG: asked its staff to move to a four-day week or take sabbaticals on 30% pay, to stave off a redundancy programme across the firm.
McGrigors: the Scottish law firm which employs 700 people across the UK, asked staff to take two weeks off without pay between June and the end of its financial year on 30 September. Salaries across the firm were frozen until October 2010.
Wragges: the law firm has seen more than 20 associates take up sabbaticals and extended maternity leave as the firm attempts to avoid the need for further losses.
Gleneagles, owned by Diageo Plc: sent letters to 700 employees in January asking them to consider voluntary severance, unpaid leave, reduced working hours or early retirement.
Thorntons: offered sabbaticals and shorter working weeks.
Esh Group: Top executives at one of the region’s largest private businesses have taken a 30% pay cut.
Leyland: announced 250 job losses and an extended factory shutdown over Christmas 2008 because of a “severe decline” in demand.
According to the CBI, nearly two-thirds of employers are operating some form of recruitment freeze and 45% have introduced more flexible working
Its very important to remember that employees are one of the most valuable items within a successful business and even though cash flow is often tight within a recession it often takes some lateral thinking by business owners and Directors to structure a business recovery strategy, whilst still trying to retain your skilled and valuable work force.