Six out of 10 bosses are cutting staff: AHRI report

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Six out of 10 bosses are cutting staff: AHRI report

More than six in ten employers (61.48%) have cut their workforce because of the global financial crisis, or are planning to do so, according to a new study.

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More than six in ten employers (61.48%) have cut their workforce because of the global financial crisis, or are planning to do so, according to a new study.
 
The study says that more than three-quarters (75.6%) of the downsizers report worforce reductions of up to 10%, while 8.11% report reductions of more than 20%.
 
Impact of financial crisis
 
The findings appear in a report by the Australian Human Resources Institute (AHRI) on the impact of the financial crisis on HR and people management practices within Australian organisations.
 
The report is based on a survey of executive-level respondents from 122 organisations.
 
Other findings include:
  • Two-thirds of respondents from downsizing organisations report the decision was made following careful analysis.
  • Nearly nine out of ten respondents (88%) from downsizing organisations believe downsizing was necessary.
  • Nearly eight out of ten respondents (79.34%) believe the GFC was primarily the result of over-reliance on shareholder value and short-term business thinking.
  • Respondents are evenly divided on whether risk-prone financial incentives as part of executive remuneration was the key factor leading to the GFC, with a little more than one-half (55.74%) believing the GFC will have a major impact on remuneration in the future.
  • Respondents are also evenly divided on whether the GFC will fundamentally change how business is conducted in the future, with a similar response to the question as to whether greater market regulation will prevent another GFC.
  • Nearly two-thirds of respondents (64.48%) believe that organisations will more actively pursue Corporate Social Responsibility (CSR) and ethics policies in the wake of the GFC.
 
Pointy end
 
‘Human resource departments are at the pointy end of decisions that organisations make to cope with economic downturns,’ said AHRI national president, Peter Wilson.
 
‘Because everything in business affects everything else, cost cutting decisions that lead to retrenchments affect competitiveness and productivity as well as brand image. They should not be taken lightly.’
 
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