(n × r) + (x × h) + (x × t) + ny (h + t) + wz (p - n)
You may well ask.
The Chartered Institute of Personnel and Development is urging bosses to consider the true cost of redundancy before laying off staff during the economic downturn. It says sacking someone can cost more than sixteen thousand pounds in redundancy payouts and recruiting a replacement when business improves. I've just recorded an interview with the CIPD's chief economist John Philpott which you can hear tonight. Here's the information you need:
n = number of people made redundant
r = redundancy payments
x = number of people subsequently hired
h = hiring costs
y = percentage quitting post redundancy
t = induction/training cost
y = percentage quitting post redundancy
w= average monthly staff salary
z = percentage reduction in output per worker caused by lower morale
p = number of people employed prior to redundancies ....
....all of
Listen to PM
© MMIX~RS~q~RS~~RS~z~RS~58~RS~)
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Oh my word! It is all happening now! And all these hieroglyphics ......
Gasp!
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I feel slightly giddy.
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Not to mention the cost of all the missing black pens.
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I didn't have the patience to work through this formula, but it does look right to me. In a former life in HR, I was often asked to calculate redundancy payments only to find the manager going pale when he saw the cost!
It's rare for a redundancy to recoup its own cost within a year (most often it takes up to two years) and so it can be cheaper to keep someone on, even if work is limited. I only recommended redundancy when there was no prospect the job would ever come back.
I have seen employers make big mistakes in reducing too quickly, losing good staff and company knowledge, only to regret it later.
In the car makers, we have seen employers adopting alternative methods to mass redundancies, which achieve cost savings and retain workers without causing all the normal fallout. This is a much better way of going about it, if it is possible.
I do feel for all my former colleagues who now face the "grim reaper" period during the recession - glad I no longer have to carry out a task which is depressing, upsetting and pretty much the most unpleasant part of the HR role.
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Nothing like real life. The workers were all given incentives to stay for the whole of the next year, so post redundancy quitters did not exist.
The bad feelings were all gone after a year.
So had the factory!
The only other redundancies I have experienced were companies that got rid of the 5-10% of worst staff using the economy as an excuse. I always thought those companies were such cowards. Bad workers should be lost evenly whatever the economy. Some major US companies run mandated monthly losses to always improve the staff productivity.
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This equation is far from complete. Among other things it takes no account of the following parameters:
e = the additional cost benefit of getting shot of the whining so-and-so that nobody liked and who was totally unproductive.
f = the increased productivity of the remaining happy workforce once they know that the person in parameter (e) is being given the push.
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Qualified Loon (6)
True, true, but no-one dare say so!
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Happyhomeworker (7) - My tongue was only partially in my cheek when I posted at (6). As someone who has had to implement redundancies in the past I agree with you that it is depressing, upsetting and unpleasant.
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This comment was removed because the moderators found it broke the House Rules.
Now that I've had a chance to read the post properly, and had a glass of something Comforting, I can see that it all makes perfect sense.
All bosses should be hit over the head with it. Or fired.
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Eddie:
Thanks for the great experiment on this issue....
~Dennis Junior~
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Mmmm... I wonder, is this God showing us his redundancy formula..?
Looks like it's a dynamic formula too
http://www.guardian.co.uk/science/2009/jan/05/galaxy-collision-space-milky-way
"Get out of the way! Galactic collision will happen sooner than scientists thought"
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Piper: this is rather disconcerting. Nils - will it affect my pension?
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I wonder why it is that when I click on a ink on the Frog I get error messages,
******
We haven't been able to serve the page you asked for.
If you typed in a URL, please make sure you have typed it correctly. In particular, make sure that the URL you typed is all in lower case.
If you require further assistance, please contact our user help staff at the following address userhelp@guardian.co.uk
********
yet if I cut and paste the link it pops up with no trouble?
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