Redundancy payouts fall for first time since 2008
Hywel Roberts, August 12, 2014
The total cost of redundancy payouts for UK companies has fallen for the first time since the recession, according to a report by commercial law firm EMW and HMRC.
British employers paid £4.3 billion in redundancy payments in 2013/14 – down 10.4% from £4.8 billion in 2012/13. This is despite several high profile companies announcing large redundancy programmes, including Barclays (2,000 jobs) and Microsoft (18,000).
The current figure is lower than in 2008/2009 when redundancy payouts totalled £4.5 billion. It remained constant until the 2012/13 financial year's peak.
The total number of individual redundancy payments made fell from 355,000 to 321,000 in the past financial year, a decrease of 9.7%.
The average payout for each redundancy for the last financial year was £13,396, down fractionally from £13,521 the previous year.
EMW principal Jon Taylor told HR magazine the figures are "consistent with the government's message" on the economic recovery.
"A lot more companies are looking to retain staff now, or at least not let them go," he said. "And the fact that the figure has fallen for the first time shows that the recovery is taking hold."
Taylor did, however, warn that redundancy is still a factor for employers, even during a recovery.
"Employers are always looking at ways to cut costs and people are their biggest overheads," he said.
"I still get calls from HR departments talking about making redundancies here and there. Large corporations take years to turn around so costs could remain relatively high for years to come."