Economic Downturn - Business Reactions
05 November 2008
Wherever we look at the moment the credit crunch is having a huge negative impact on organisations. A recent survey by CIPD and KPMG indicated that 26% of respondents have contingency plans to make new or further redundancies in the next twelve months.
This is further fueled by the relationships with banks and businesses worsening, where lending to businesses has declined, and even business loans and credit being called in by banks. Businesses that are having credit extensions refused or credit reduced are going to have limited options as to what they can do to protect their business and their employees.
Some organisations are already taking steps by making redundancies to reduce operating costs, whilst other companies are imposing reduced working hours.
It is not just small to medium sized businesses that are struggling during this credit crunch. There are fears that 20,000 jobs could be lost due to the merger of Lloyds TSB and HBOS; the possibility of up to 30,000 job cuts being made at the Royal Mail, as well as Homebase set to announce that they are also going to make significant job loses.
It is likely that in these uncertain times that pay rises within companies are likely to take place in order for companies to reduce operating costs, and to help them to weather the credit crunch.
Click Here for HR Solutions fact sheet on how to reduce operating costs, and manage redundancies.