12 Ways to Cut HR Costs: Part 4 - Natural Wastage

By Daniel Pollard - 22 October 2020

UK employers consulted with staff on nearly half a million redundancies during the pandemic - roughly 1.5% of the working population. The true number will have been much higher as small-scale redundancies are not captured by government statistics. The furlough scheme will have given many employers an opportunity to pause but as the scheme comes to an end, employers face some tough choices.   

Over recent months we have seen a huge amount of creativity from our clients in finding ways to minimise redundancies. Over the next couple of weeks we will share 12 possible strategies adopted by our clients and some thoughts of our own to help reduce cost without compulsory lay-offs.

4. Natural Wastage

As an alternative to redundancies many employers are:

• Allowing fixed term contracts to expire without renewal (noting that this amounts to a dismissal in law requiring consultation).
• Terminating contracts.
• Not replacing leavers.

Large companies, who are subject to the changes to the “IR35” rules on intermediaries, which are now due to take effect in April 2021 reducing their contractor population have some additional benefits. Not only does ending these contracts eliminate a compliance burden but the current situation makes it easier to integrate contractors with essential skills into the regular workforce at realistic pay rates. Read more about the changes to IR35 here.

For all 12 ways to reduce HR costs without redundancies click here.