FSB: redundancy alternatives could help small businesses keep skills

Date: 7th July 2009

The Federation of Small Businesses (FSB) has put its support behind a selection of redundancy alternatives, suggesting they are beneficial to both the employee and the employer.

This follows calls from the CBI for an increase in the number of schemes on offer to employees in this difficult financial time.

Suggestions from the CBI on how best to combat redundancy include an 'Alternative to Redundancy'. Rather than face redundancy, employees would face six months away from work with half their wages paid by their employer and half by the government.

Prior to this suggestion, BT had suggested their employees take a year of leave on 25 per cent of their pay.

A spokesperson for the FSB said that such alternatives benefit the employer as much as the employee. By keeping employees 'on the books', small businesses are not throwing away their previous investment in skilled labour.

The spokesperson said: "Small firms are doing all they can to hold on to their employees during these tough times and a short time working subsidy provided by the government would help avoid redundancies and help employers retain and invest in skills to prepare for the future."

The CBI predicts unemployment will rise to 3.03 million in 2010.