A new service has been launched to allow small businesses to lower salary costs but hold on to key staff and retain their job and salary.

The service from Randstad allows small businesses to continue to pay employees' salaries and benefits, but the HR services company puts the employees on secondment at another local company and pays their earnings back to the original employer.

Staff would go through the normal redundancy consultation but would then be offered the offsetting alternative, which would last between a week and 10 months,

Although the employer would continue to pay salary, National Insurance contributions and contractual benefits, the money from the secondment would allow for a saving of up to 89% in staff cost, not to mention the savings in redundancy payoffs, outplacement costs, recruitment and training of future employees.

Patrick Maloney director of staffing solutions at Randstad, said: "Without our offsetting service, many businesses would be forced to make redundancies of skilled employees, which is costly and time-consuming, and would leave them with the challenge of having to find and pay for the recruitment of new talent when the upturn comes."

And Kevin Green, CEO of the Recruitment and Employment Confederation, added: "We are pleased to see our members such as Randstad developing innovative solutions to help their clients and candidates in this difficult jobs market."