Redundancy warning

Posted on 26 Feb 2010 by The Manufacturer

Awarding organisation EAL (EMTA Awards Ltd) urges manufacturing companies to consider the long term consequences of redundancy before making drastic decisions.

On the heels of a week where factory mothballing has worryingly returned to the manufacturing scene after a period of relative stability, EAL has called for British manufacturing companies to seriously consider their options before downsizing their workforce. The company’s Managing Director, Ann Watson, warned that the long term costs of training and developing a new generation of skilled workers in the inevitable up-turn could outweigh the money short term savings made through redundancy.

Watson used the recent lay-offs at Corus steel, who announced 1,600 redundancies on February 18, as an example which could see large numbers of skilled workers leave the sector as they attempt to find other employment. She highlighted the dangers of letting skilled employees leave the sector by pointing out that their skills would be in great demand as the economy picks up over the next two to five years.

“The manufacturing sector is one which requires its workers to be highly skilled and experienced,” she said. “People made redundant in the sector are a major loss; their individual skills will in many cases have taken at least four years of an apprenticeship to hone and cannot be replaced overnight.”

Watson argued that redundancy was often a short term reaction that did not consider the future demand on the sector. She continued: “Redundancies may save money initially, but the future costs of recruiting and training new workers who could take up to four years to start providing real value to a firm can significantly outweigh any cost benefit.”

She added: “We have seen a number of organisations in the sector learning the lessons of past recessions and taking other measures such as a reduced working week in a bid to retain skilled workers in anticipation for the upturn.”

This call for long term vision from manufacturers comes on the eve of EEFs Manufacturing Week, which aims to raise the profile of the manufacturing sector as a career path of choice and communicate industry need to the policy drivers behind our next government, whatever form that may take. If these messages are to be delivered with authority industry must take a confident stance and show itself to be a viable and secure employment environment.