Many organisations around the world continue to face escalating changes in their business environment, brought on by a combination of factors including increased competitive pressures, mergers/acquisitions and other strategic or operational shifts. In many instances, the evolving environment requires a reshaping of the workforce. Such changes inevitably pose significant organisational and HR challenges as businesses attempt to cut costs, improve earnings, or increase productivity.
Often such changes lead to workforce reductions. Redundancies in Ireland have averaged 25,000 jobs in recent years with a 27% increase in the numbers reported in the first four months of 2008.
Some predictions suggest that the rate of increase will escalate leading to further challenges for many employers in Ireland.
The Options
In order to achieve the required efficiencies employers may opt to implement redundancies without fully exploring the alternative solutions available. Depending on the particular circumstances, a range of actions may be used to achieve necessary efficiencies without having to make employees redundant. Added benefits may also arise from some of these actions such as a greater alignment of HR strategy with business strategy.
Achieving efficient workforce reductions
Of course, situations arise where redundancies become inevitable, posing significant questions and challenges for an employer. Many complex issues need to be addressed, including:
- Legal issues
- Design of the exit package
- Tax & PRSI treatment
- Pension & employee benefits
- Employee assistance
How We Can Assist Employers
PwC's Workforce Reduction Services team has many years experience in assisting employers in Ireland to effect a smooth termination programme. We bring together a unique blend of business advisors, including reward, employment law, employment/personal tax, pensions, benefits, IR, HR and management development specialists, to help employers of all sizes who are engaged in reshaping their workforces - from organisational re-structuring to an assessment of the efficiency of reward strategy and training programmes.
Our collective experience has given us a keen insight into the problems faced by organisations and individuals undergoing such changes and we are therefore only too aware of the need for exit programmes to be handled with the utmost care and attention.
For further information, please contact any of our team listed above.
