To hire or fire? Entrepreneurs weigh up tough decisions

By Gabriella Griffith at Prelude

The last thing entrepreneurs and business leaders want is to let go of valuable staff. Finding the right talent is often one of the most pressing issues that businesses must deal with.

But a new survey has shown that 2013 might be a rocky year for businesses as they fear they might have to make redundancies.

According to a survey of 783 UK businesses by Right Management, the talent and career management expert within ManpowerGroup, around one in twelve UK employers (8%) are uncertain if they will need to make redundancies in the next six months. This is a significant rise from 2% in 2012.

To further compound this issue, only 22% of respondents claimed they are effective at redeployment.

“As the UK economy remains flat and growth stalls, companies are becoming increasingly unsure if they will have to let staff go,” says Mark Hodgson, practice leader of Talent Management in Right Management UK & Ireland.

“In recent weeks, media headlines have confirmed a number of companies and household brands that have disappeared from our high streets. It would appear that businesses are losing confidence that they will get through the next six months without making redundancies which is concerning. Employers don’t want to lose talented staff but they often think that making redundancies is the only way they can cut costs.”

This news comes as we hear reports that the UK has one of the worst levels of youth unemployment in the developed world. Britain is now only behind Greece and Spain for youth joblessness in the OECD.

The author of the report by the Work Foundation, Lizzie Crowley has called for the government to take measures to increase apprenticeships and training.

‘In many other developed nations, youth unemployment has remained low despite the global downturn,” said Crowley.

‘However, in the UK youth unemployment as a proportion of 15 to 24-year-olds has increased at a faster rate over the course of the recession than both the European and OECD averages.

‘While the reasons for this are complex, it’s clear that the UK can learn from the experiences of those countries that have fared much better in terms of youth unemployment. The Government should focus on those policies that have been shown to work, cherry-picking the best responses from other countries and adapting them to the needs of the UK labour market.’

With companies struggling to maintain current staffing levels, it could prove difficult for them to provide the kind of programmes that unemployed youth need to get into work.