Cutting back too far on staffing during the recession could leave businesses lagging behind when the upturn arrives, believes Andrew Hardaker, managing director of recruitment specialists, ATA Selection. He says that many businesses are looking at ways of saving money – and, with employees often being the most expensive
overhead, staff cutbacks seem inevitable.

His view appears to be supported by the most recent quarterly CBI Industrial Trends Survey for the manufacturing sector which showed that, in the last quarter, 47% of firms reduced their headcount. Only six per cent increased their employee levels. In the UK since December 2007, 4.4m jobs have been lost, and the unemployment
rate is currently 7.6%.

But cutting too deep could be a false economy, argues Hardaker. Getting rid of too many members of staff and, in particular, making key employees redundant, could make growth difficult and slow when the market improves.

Companies which make fewer job cuts during the recession won’t experience the lag between recruitment and return on investment. The winners when the market becomes more buoyant will be those companies that can balance between making cuts that enable them to survive the downturn and maintaining their talent pool at a level that will enable them to capitalise on the inevitable, eventual upturn, he says.

In his view, managing a workforce through the recession involves trimming away only non-key staff; developing a consistent approach to employee retention; communicating the business’ vision to employees; recognising and meeting employees’ career development aspirations through learning and development activities, and breeding employee loyalty.

Comment: There’s nothing controversial there. With all the credibility of a professional with a vested interest, Hardaker has given some generally accepted good advice. The problem is – as today’s jobless could testify – is that the real world is always a special case and all the theory in the world doesn’t stand up in the hard light of reality. It’s still a nice idea though. Pass me my rose-tinted spectacles…