Firms appeal for staff help in bid to beat downturn

THE recession has seen the phrase “lucky to have a job” become a mantra among nervous workers, but many are now being asked to make drastic concessions to ensure they stay employed.

The past week has seen major UK employers British Airways and telecoms giant BT, which between them have more than 140,000 staff, turn to their workforces and appeal for them to make major changes to their pay and working conditions.

BT offered staff the chance to take a year’s holiday in return for a 75% pay cut, and receive the remainder of their salary as an up-front payment.

The group also told employees they could have a one-off £1,000 payment if they agreed to go part-time and have the opportunity to restrict hours to school term times.

It described the tactic as a “progressive” human resources policy, but the move was a clear measure to avoid more job losses on top of the 15,000 already announced this year and the pay freeze unveiled in March.

The group is just one of a number of recession-hit firms looking at alternatives to further mass redundancies.

The Chartered Institute of Personnel and Development (CIPD) found in a survey earlier this year that half of employers had introduced pay freezes, 40% were cutting temporary or agency workers to prevent losing in-house permanent staff, and 15% had introduced short-time working.

But more painful steps were also being taken, with 7% of those surveyed cutting pay.

Car manufacturers were among the first to employ innovative measures to limit staff lay-offs, with the sector having been an early casualty of the global recession.

Late last year, Vauxhall offered the 2,0000 workers at its Ellesmere Port plant the option to take a two to nine-month break from work on 30% of their basic salary.

Workers at Jaguar Land Rover, which employs 2,000 people at Halewood, have also accepted a four-day week and a one-year pay freeze in exchange for a promise there will be no compulsory job cuts for two years.

In the wider corporate sector, accountancy giant KPMG was one of the largest groups to follow suit. The firm, which employs around 11,500, announced earlier this year it was asking employees to sign up to a temporary four-day week or take up to 12 weeks’ holiday on 30% of pay.

It was shocked by the response. Around 85% of its workforce signed up for the scheme – far more than its target for two-thirds take-up.

The path has not been so smooth for BA, which has struggled in talks with unions over its plans to change working conditions and pay in what it has described as a “fight for survival”.

BA is putting forward a radical package that is not sitting easy with many. Not only is it looking at another 3,700 job cuts, the airline has also asked staff to volunteer to work unpaid for up to a month.

And it is looking to freeze pay for up to two years, as well as making swingeing changes to pay, hours and conditions.

BA reportedly wants major changes to cabin crew terms and conditions, including reduced holiday allocation and travel allowances.

The group’s bosses attempted to lead by example, with chief executive Willie Walsh and the finance boss waiving a month’s salary in July. Mr Walsh has also said he will forego any annual bonus for the third year in a row.

CIPD said it generally applauded any effort to avoid making compulsory redundancies – the “most damaging thing any employer can ever do to its workforce”, according to the group’s public policy adviser Mike Emmott.

However, he said the schemes are all built on trust, with staff being asked to make painful choices in the knowledge that the alternative could be worse.

The current tactics being taken mark a shift change in attitude since the recession of the early 1990s, when companies made lay-offs with no thought of the implications, said Mr Emmott. The CIPD believes alternative measures work both for the employer and the employee, helping save money for the firm, while also engaging staff and giving them a choice over their future.

Unions have also tended to support such measures in tough times, as long as they are not seen as an opportunistic way to cut wages and alter terms and conditions to a firm’s advantage.

In fact, late last year, unions representing some 25,000 steel workers at Corus offered a 10% pay cut to stave off job cuts, while, in October, more than 4,000 employees at digger maker JCB voted to work fewer hours to save 350 jobs.

Concerns over these types of plans centre on the need for any measure to be short-term and allow for employees to benefit when their firm returns to profitability.

BA recently agreed a groundbreaking deal with its pilots to receive shares in the airline in return for a pay cut – essentially allowing them to participate in a long-term incentive scheme.

While these types of agreement are still rare, the innovation being used by embattled employers raises hope that UK plc has begun to acknowledge the shortcomings of knee-jerk mass redundancies when times get tough.

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