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Be honest with staff in these tough times

I received a human resources bulletin last week and some of the statistics in it were remarkable.

The Chartered Institute of Personnel and Development suggests that only 26% of the firms it questioned were likely to make redundancies this year. This means that 74% of companies are using a slush fund to remain solvent or looking at alternative solutions to retain staff.

Some of the options being considered are pension holidays by employers, using government grants for training, rigorously enforcing the retirement age, encouraging sabbaticals and dropping the use of agency staff.

On the employee front, the briefing was more eye-opening. More than 60% of employees questioned expect to receive a pay rise in 2009 and only 2% expected a pay cut. This would suggest they are blissfully unaware of what is going on in boardrooms.

If you are making job cuts, you are warned not to apply the last-in first-out mentality as this can be perceived as discrimination.

And be wary where 20 or more staff are at risk as the legal requirements become more onerous and penalties for unfair dismissal can reach £72,900 per employee.

The bulletin was a good reminder that we need to be honest with our staff in these hard times and tell them more than normal to prevent unnecessary stress.

We must toe the line when it comes to compliance and the Financial Services Authority, and also consider our staff and the rules that protect them.

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